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Maersk’s decision to shutdown Damco’s forwarding business becomes an opportunity for its competitors

Maersk’s decision to shutdown Damco’s forwarding business becomes an opportunity for its competitors

We reported earlier this week that “DAMCO TO MERGE FULLY INTO MAERSK WITH MAJOR HEADCOUNT REDUCTIONS RESULTING” and now we have another unusual twist to the story.

Maersk’s move to shutdown its Damco forwarding business is seen as a competitive opportunity by Damco’s freight forwarding competitors, with DB Schenker leading the pack and announcing a package for customers that may be seeking alternatives following the changes.

DB Schenker has put aside business niceties and is openly targeting Damco customers, following Maersk’s decision to subsume the brand. The package includes an offer to take over short-term agreements of up to two months, with the same conditions customers had with Damco.

“Stable conditions promise stable supply chains: that is what DB Schenker stands for,” said Thorsten Meincke, board member for air and ocean freight at DB Schenker.

“The last thing shippers need at present is further uncertainty. We are making an offer to all those now looking for long-term security and reliability.”

Losing customers to rivals is one of the biggest risks of major structural changes, but companies rarely advertise their willingness to poach customers. One industry pundit said the move could backfire on DB Schenker so what eventuates will be interesting to watch.

The move by carriers into running freight forwarding or 3PL solutions have very few success stories. The most famous casualty of this foray by carriers was APL Logistics. Despite being profitable, the company sold off to Japanese forwarder KWE Kintetsu in 2016 to help offset the series of poor management decisions made by parent NOL.

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