Big tech threatens maritime with push into logistics

David Levy
April 14, 2020

Here are two numbers to share:   



The first is the market cap (in billions of USD) of A.P. Moller-Maersk Group (also known as, simply, Maersk) last week.  

The second is the amount of cash (also in billions of USD) Amazon had on its books at the end of 2019.  

That means Amazon could buy Maersk with cash and still have enough left to add another one to its shopping cart.  Or a couple of smaller shipping firms. Maybe it won’t.  But maybe it will.    

Look at these headlines from the last couple of years regarding Amazon’s aggressive push into logistics: 

If you are in the business of shipping goods on the high seas, you must be aware of the potential threat that Amazon poses to your business.  

ou know who is DEFINITELY aware of this threat?  Maersk. 

“Amazon is a threat if we don’t do a good job for them,” Soren Skou, the Chief Executive Officer of  A.P. Moller Maersk A/S, said in a phone interview. “If we don’t do our job well, then there’s no doubt that big, strong companies like Amazon will look into whether they can do better themselves.”   

Logistics: Big Tech’s ‘secret weapon’ to disrupt maritime 

Simply put, Big Tech--whether from Amazon, Alibaba or a newly e-commerce savvy Walmart--poses an existential threat to current shipping owners with the potential to cause that same kind of large scale disruption as has occurred in many other industries. From media to music, incumbent players’ market share evaporated in the face of competition from untraditional technology players.    

Look at what Apple did to music.    

Look at what Uber did to the taxi business.   

Look at what Amazon has already done to pretty much everyone else.  

Is there anything the global maritime shipping industry can do to stop Amazon from dominating logistics and fleet management on the ocean?  Yes.  It can band together by sharing data.  

The impact of sharing in shipping

In the white paper OrbitMI commissioned entitled “The impact of sharing in shipping,” Critical Future outlines the many benefits of data sharing to the maritime industry.  From an economic point of view, the report states that $237 billion in value would be unleashed over the next seven years through tighter collaboration based on data.  From a competitive point of view, Critical Future details how working together can stave off Amazon’s market entrance and other external threats.  

Sharing in shipping may be the mechanism to preserve the market share of key players. A go-it alone mentality puts the shipping industry at risk from formidable companies outside the sector, such as big tech.  Research suggests the risks for the shipping industry lie in inaction, as tech players could capitalize on the convergence of key trends such as big data, IoT, connectivity, GPS, AI, and blockchain.  

Click here to download our report & find out more  

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