The global logistics ecosystem has been disrupted from the beginning of the COVID-19 pandemic. The restrictions brought about by the pandemic affected manufacturing as well as the movement of cargo.
Supply chains came crumbling down with uncertainties for which there was no playbook to refer from. Demand and supply patterns shifted dramatically, further adding to the disruptions in the system.
At such a time, the logistics suppliers kept the wheels spinning for economies to stay on track as much as possible. Maersk had all its vessels sailing, warehouses functioning, and ports operating.
However, it was not smooth sailing as conditions remained foggy with wavering developments around the spread of the pandemic. One particular challenge that Maersk faced during this period in India was moving cargo on landside – from manufacturers facilities to the port for exports or vice versa for imports. Truck drivers had returned to their home towns in fear of the virus, and state border transport became a big hurdle with inconsistent rules being implemented across different states.
At the same time, in line with the goal of creating integrated solutions for customers that go end-to-end, teams within Maersk started focusing on understanding customer requirements and designing tailor-made solutions. Increasingly moving cargo on rail instead of road was one such solution.
Using rail to move cargo had multiple benefits for Maersk’s customers:
- Up to 30% quicker transit times as compared road transport
- Solid, unhindered connectivity between ports and manufacturing hubs
- Scheduled movement for better predictability
- Around 14.5 MT lower carbon footprint
As Maersk started developing customised solutions for customers rather than offering them off-the-shelf options, deeper insights into customers’ needs and challenges started unfolding. Using this data, Maersk developed 13 new weekly dedicated rail services of which some were based on the ‘assured transit’ concept on the Dedicated Freight Corridors (DFC). These rail services were designed in such a way that different industrial verticals were to be connected to the ports. Examples of these were the ‘Automotive Express’ running between the Northern Capital Region’s (NCR) automotive manufacturing hub and the port of APM Terminals Pipavav, Gujarat or the ‘Retail Express’ that ran on DFC to give assured transit time to lifestyle and apparels sector. The benefits of dedicated solutions like ‘Retail Express’ were multi-fold – customers could reduce their inventory hold by almost 10% and were able to connect to ocean transportation leg in time, saving them penalty costs too.
The 13 new services offered by Maersk include:
Maersk became the pioneer of offering ‘Assured transit times’ with its rail solutions to customers. The forward-looking solutions developed are expected to aid the rising demand for sectors such as eCommerce through the dedicated services. eCommerce, which has traditionally run on road transit, is expected to move towards rail even more in the near future as it gives assured transit for time-sensitive cargo.
“Being committed to connecting and simplifying our customers’ supply chains meant we had to go beyond solutions that are on the menu card. We wanted to create exciting offerings that would delight our customers, especially in the tough pandemic situation that we have been operating in”, said Vikash Agarwal, Managing Director, Maersk South Asia
He added, “Having flagged off 13 new services successfully over the year, Maersk is truly proud to have designed and implemented what customers needed. And it doesn’t end there – with the new environment-friendly rail services, in 2021 we reduced carbon footprint that is equivalent to the emissions from a car being driven for around for 60,000 km.”
Maersk witnessed 43% growth in the movement of containerised export cargo on rail in 2021 and 23% growth on rail for import and export combined.
“Unlocking the potential of rail solutions to move cargo during the toughest times of the pandemic has been hugely satisfying. To be able to play a role in developing tailor-made solutions for customers which ultimate helped the traders in the country connect to the global market was even more gratifying.”, mentioned Akshyat Bhatia, Head of Landside Transportation, Maersk South Asia
Maersk plans to develop further on the foundation of the rail solutions in 2022.
“Rail has always been considered as a second alternative to road transport despite being safer and faster. Last year we have created 273 new corridors with rail as the backbone and connected our customers on this highly efficient mode of logistics all the way to their hubs of convenience. Having carried more than 50,000 containers (twenty feet equivalent units / TEUs) over and above the previous year and having covered 150,000 km, we are confident of building on this solution in the coming years too”, concluded Jyoti Mitter, Rail Product Manager, Maersk South Asia