End 2 End Logistics-The next winner take all field

The common buzz among logistics related players globally whether it is lines, terminals, forwarders, or large transporters is “E2E.” Everyone wants to be the “E2E maestro”; the controlling agent of the eco-system and service partners, as many think this is the way to become the one-stop shop and leader in the space. With the advent of digitization in the space, more and more players are now looking to expand their footprint in the space. What is starting to happen in the E2E space is what has happened in the other spaces of ride sharing, food delivery, home sharing, where a powerful regional consolidator will start offering more services at a single point, and eventually take most of the market share, leaving all the remaining players to fight for scraps.

But, for now, the long haul containerized E2E is still in its infancy as no single player has been able to take the bulk of the market share in this space for container freight, but there are some favorites offering some creative solutions. So for now, many alliances are forming among players as many believe that the right partner in the space can ensure a complete E2E solution is possible. Some of the top attempts into the E2E space include:

1. Mitsui O.S.K. Lines (MOL) from West Coast US Ports -NEXT Trucking-Warehousing start-up iDC Logistics

This multi-partnership target’s smaller Asian enterprise co-load containers bound for the United States. According to William Cassidy of JOC, the solution de-consolidates and trans-load’s the parcels near the ports of Long Beach and Los Angeles via iDC and NEXT Trucking. In this model, trucks are sourced on the NEXT digital platform, who then tracks and ensure timely, delivery of the goods to distribution centers (DCs) or stores throughout the United States. This is basically an end-to-end solution that can allow even small- and medium-sized vendors to ship products to the United States. The MOL partnership allows a one-stop solution from ocean to freight outbound movements to warehousing to the last mile focused on matching loads bound out of California with truckers looking for freight at locations at the rates they prefer.

2. APM North American Terminal Operators-Transportation Services to Inland points

Terminal operators in the United States have started to offer beneficial cargo owners (BCO) with intermediary pickup and drop off services at locations more than 160 Km away from the port. According to Bill Mongelluzzo of JOC, terminal operators are entering the first mile by investing in logistics operations, inland facilities and trucks for their BCO customers. They are also partnering with partnering with logistics providers and railroads that provide this service. These kinds of services help build importer loyalty and allows the importer to avoid spending on transportation services to congested terminal areas. This offering is an early stage move into the end to end space, where a terminal operator also offers transportation services from its own terminals, to ensure the customer is less likely to divert.

3. Cosco Line-Cosco Ports Landside Expansion based on China’s One Belt One Road Strategy

Cosco is moving into controlling China’s landside supply chain especially on ports and routes that are placed on the one-belt one road route. According to Greg Knowler of JOC, Cosco already operates more than 150 sea-rail transportation routes, covering 100 ports and internal container stations along 27 Chinese provinces. The line already a has transportation hub Piraeous Port, Greece and has started to create a total end to end routes on their “China-European sea-rail express business.” This means they have already begun to execute true end to end product by offering the first mile from Greece to Piraeous Port-Service from Greece to China to offering the last mile from China to their final destination through one of their hinterland rail-sea corridors. Thus Cosco is on its way to becoming a provider of comprehensive container logistics solutions.

These examples exemplify that there are 2 dominant methods that are being built in this space. The first method is a strong logistics platform that allows partnerships to easily integrate such as iDC-NEXT-MOL or have enough assets to provide transportation services out of a seaport. The first model seems to be far more scalable but is more difficult to execute as it requires a deeper visibility of the terminal, transporter, and dry port/warehouse. While the 2nd method is easier to execute now as it is an additional service that is being offered; the challenge being that many lines/operators are stuck to areas where they have terminals.

But, the common first step among all players in the space into E2E is consistent transportation services with proper visibility. Cosco and APM are already aggressively offering it their importers at most of their ports to show they are really interested in offering more to their customers. This is critical because it proves to their customers that these players are committed to E2E and are interesting in being a full logistics player right now. By, moving into this space Cosco and APM are also building regional route clusters, where they will get complete visibility of the flow of their goods, thus allowing them to use E2E in the future to divert cargo into their terminals through complete visibility and strong technology backed solutions.

So, with winner take all, logistics players are trying to become the FedEx/UPS/DHL for containers; an oligopoly where complete data visibility allows for complete one-stop shipping.