'One Country, One Price': Maersk's India Director Explains It's New Solution For Small Business Owners

Maersk, a Danish shipping and logistic company, last week announced ‘One Country, One Price' fulfilment solution in India with an aim to revolutionise E-commerce. Maersk, which plays an important role in international trade and commerce, said the solution would particularly be beneficial to small business owners who rely on multiple logistic partners for different activities.   

The new solution offers a single window access to an entire logistics ecosystem, including ecommerce platform integration, warehousing and country-wide distribution, all for Rs $1 or Rs 80 per order.

With its ‘One Country One Price' offering, Maersk said it would help sellers reach distant customers at simpler prices. "With this solution, Maersk is taking the complexities out of its customers' supply chains by providing single window access to all required solutions, such as storage in warehouses, last-mile deliveries and executing return orders, all while providing end-to-end visibility at unified pricing," Maersk said in a statement then.  

Maersk's India managing director Vikash Agarwal spoke to The Core's founder Govindraj Ethiraj and explained how the ‘One Country, One Price'  solution would help small business owners. "The clients need not worry about aspects such as technology, storage of goods, or types of channels," Agarwal said. 

Here are some edited excerpts of the interview:

Can you elaborate on how this solution will work?

Today most small and medium-sized brands and businesses are selling through their e-commerce websites and are growing rapidly. The present market size of this B2C is almost $12 billion and it is expected to grow at 40% per year and reach $60 billion in the next five years. 

While the growth is supposed to be exponential, the complexity in the supply chain is becoming a hurdle for these B2C customers which are MSME in nature. In a typical scenario, a brand selling through its e-commerce website will have to deal with various vendors to solve the supply chains and logistics requirements such as warehousing, distribution, and last-mile delivery along with written management. So each of these vendors, in turn, would bill the brand individually and all those costs would get added up. 

Contrast this to the scenario where Maersk integrates the brand's e-commerce system, provides storage, and does the last-mile delivery through a single solution. We are offering 60 days of storage, and delivery across India covering 18000 pin codes in 48 hours at a flat rate of Rs80–up to 500 gms-per order and 20% returns to origin at no fixed monthly costs or no minimum orders. This will then help these brands to focus on their business without worrying about the supply chain complexities. We have established a network of warehouses, and distribution vehicles that will be deployed to help these B2C customers.

 

You are therefore offering both a physical service as well as a software-a solution-in-a-box type of service.

Yes, packaged into one. The client has to merely sign a contract with us for managing their supply chain and then we would take care of everything, end-to-end. They would not have to deal with anything or anybody else. 

 

So can a brass seller in Moradabad dial into your system and then set it up and will it be as easy as it sounds right now?

It is almost like plug and plug. The clients need not worry about aspects such as technology, storage of goods, or types of channels. So irrespective of whether the clients do it via a marketplace or through their e-commerce site we take care of the complete ecosystem. The IT piece, the application piece, physical storage, physical distribution, and written management-are taken care of when a client signs up with us. They come to us and start shipping from the word go.

 

How is this different for Maersk? Globally you are a shipping and logistics giant, with a focus on shipping at least from a brand recall point of view. So how did this transition happen?

In the past, Maersk has been known as a shipping line involved in the movement of cargo from port to port across the oceans. However, almost 5 years back we changed our strategies and decided to become an integrated logistics company. This means that we have been, over the years, building varied solutions and networks of logistics that offer end-to-end logistics solutions to our customers. We are already providing warehousing and landside logistics such as movement on air freight, customs clearances, supply chain management, and so on.

Our integrated logistics bring incredible visibility to our customers and offer highly predictable and flexible solutions. This gives them the resilience to adjust to the market demand through single-window access to all their logistics requirements. Our integrated logistics strategy is global and we are aligned with it in India too. So this is not very specific to India and we have been doing it over the past years across the globe.

 

To extend that example, you could be picking up that product from some seller somewhere in India and could also be shipping it overseas.

The product that we have launched today will not cover international cross-border movements. We plan to offer that in Phase 2 where we will move a seller's product across the border to multiple other countries. Our next step is to take Indian products across to different parts of the world. So, today we are looking at a pan-India distribution and fulfillment but it does cover borders across the globe. 

 

How long did it take to build this product?

We have been working on this platform for the past year. Specifically, this idea has been developed over some time. During customer interactions, we realised that large customers have the bandwidth and capacity. However, the newer startups–B2C-that are now part of the ecosystem and want to be connected to their customers are facing challenges. So, over the last 6-8 months, we gained inputs from our customers, understood their pain points, and realised the need for a single window solution that reduces supply chain management complexity and helps them focus on their products and solutions.

 

What is your sense of the freight movement now? What are the trade trends from your perspective?

The recent global pandemic has caused a massive disruption in the overall logistics sector. The lockdown disrupted the supply chain at the beginning with the movement of cargo coming to a complete standstill. Once the lockdown was lifted, the demand for consumer goods shot up through the roof and the logistics companies struggled to meet the rapidly changing market behaviour. A lot of equipment had to be realigned as per market demand, there was a shortage of space on vessels and a lot of congestion and bottlenecks that led to the goods not reaching the market.

However, since last year, things are returning to normalcy. We are going back to the pre-pandemic level supply chain. That said, we have learned a lot through this period, and we now know the importance of resilient supply chains better than ever. Technology adoption and digitalisation of supply chains have accelerated. These changes have resulted in more efficient logistics. Presently, we are seeing that overall demand in the market has softened, however, as we progress through the later part of the year, we will see the inventory restocking starting back again, and the demand for goods will go up. We are confident that there is a bright future for global trade and Maesrk is ready to play its role while growing along with our customers.