"Silent" multimodal revolt
Now I’d love to cover one of the latest tendencies that may change the whole industry and its players significantly.
Playing the economy means knowing its rules that do not change often. When shift happens it becomes a vital and outstanding event. Gathering into farming, crafts into the industry, and industrial revolution at last – all these transitions always cause tremendous changes. Sometimes they spawn victims among those thrown overboard who failed to accept and adapt to a new reality.
Fairly long time the transportation and logistics industry rules hardly changed. Assets are the only criteria companies operating rolling stock, vessels, equipment, and terminal infrastructure provided services to customers for many decades. The same story goes for freight forwarders that combine different logistics solutions selling them to beneficial cargo owners.
What’s now? Economic approaches in the transportation industry start to completely change. Today transport providers - port operators, and large maritime line owners - literally breakthrough their own target audience and deliver complex logistics solutions as freight forwarders.
Essential changes occurred the moment when based on the «domino» principle, large companies that own transport assets one after another started to change business models turning into global logistics operators. Instead of fitting into the logistics solutions offered by freight forwarders and fighting for a share in their segment, they made a stake in their own «door-to-door» multimodal logistics services development. These are not a one-time case, but a whole new trend.
The first example to point out is Maersk, the industry leader, whose strategy may be expressed as a simple motto - «All the way». The key decision was made in 2016 when all «little-to-do-with» divisions reorganized into one multimodal container logistics operator providing solutions on a door-to-door basis. According to Gartner, it shifted its own subsidiary company Damco in global 3PL-operators rating in 2020.
Next, the CMA CGM company guided by a successful rival decided to redeem the logistics company CEVA logistic and started to change into a multimodal operator.
Publicly criticizing Maersk and CMA CGM actions previously, the world's 3rd sea container carrier COSCO also invested billions in terminals, rail transportation, and road infrastructure. Being a part of the «One Belt One Road» project, this decision has been made to control supply chains from Asia to Europe both by sea and land. Moreover, @freeved telegram channel recently reported that COSCO actively promotes multimodal logistics services on the Russian market.
Probably one may state that three container carriers, even the largest ones, are not trend setters. Though, the same picture is traced among port operators that rapidly reorganize into global multimodal operators. Today DP World also actively redeems sea carriers, logistics companies, rail terminals, and digital solutions. Both PSA Group and OneNetwork intensively expanding own capacity in 4PL (Lead Logistics provider), never hiding the fact that it aims is to control supply chains over the Internet.
50% of the world market may shift in the same way soon. Such changes are not a tendency anymore; it is a total breaking and shaking the rules of a game we’re speaking. A revolt in one of the key economic sectors able to transform the whole transportation and logistics industry.
We should admit that the shift towards multimodality described above didn’t happen today or a couple of years ago. Many companies tried to play in a new way before; it’s been more experimental, though. Today we entered the information era when such a way becomes the most effective strategy of all key players allowing transporters to turn into logisticians. It’s more about changes in the type of thinking and major industry business model appearance. And so, a new era of multimodality has begun.
