No more lost or late goods if Maersk can get hot items shipped on time, says Asia-Pacific president

SINGAPORE - Within the next five to 10 years, global shipping will be judged less by how fast containers move and more by how reliably goods arrive on store shelves, according to Maersk’s Asia-Pacific president Ditlev Blicher.

Shoppers will increasingly find the right T-shirt colours, shoe sizes that usually sell out, or laptop models with the exact specifications available immediately – rather than being told to “order and wait two weeks” – as supply chains become more predictable and efficient, he told The Straits Times in a recent interview.

This shift, which will be driven far from the mall, on container ships and at ports consumers never see, is turning reliability into the most valuable currency in global shipping, an industry long plagued by delays and volatility.

It is also one that Maersk, the world’s largest container carrier, believes shippers will increasingly be willing to pay for.

“For retailers, the worst outcome isn’t paying a bit more for freight. It’s a lost sale, where the customer is ready to buy, but the product isn’t available,” Mr Blicher said.

To avoid that, retailers and manufacturers have traditionally relied on buffer stock held across warehouses, storerooms and even in transit. But holding inventory “just in case” is costly, tying up capital and adding complexity at a time when consumer expectations and competition are rising.

If these companies can trust goods to arrive when promised, they can safely reduce buffer stock without risking empty shelves, while saving substantially on costs, Mr Blicher explained.

He added that each time consumers buy, say, a new smartphone, they expect better performance – such as a faster chip or sharper camera – or a lower price if improvements stall.

Yet, while logistics can account for roughly 10 per cent to 15 per cent of the product’s cost, the way shipping, trucking and warehousing operate has barely changed over the past three decades, making it difficult for retailers to adjust product prices.

“That gap is where the next step change in shipping and logistics will come from,” he said.

A premium for reliability

This has driven Maersk’s pursuit of reliability leadership over the past few years, an investment involving billions of dollars and the overhauling of its shipping network that is now being put into practice through a partnership with German carrier Hapag-Lloyd.

Launched in February after years of investment and planning, the Gemini Cooperation was formed between the two carriers to create a highly reliable ocean network for East-West trades by combining their fleets, networks and expertise to offer better schedule reliability and efficiency.

Under the partnership, Maersk will deploy about 60 per cent of the network’s capacity, with partner Hapag-Lloyd providing the remaining 40 per cent. The operational collaboration will comprise 29 mainline services across seven major trade lanes, supported by a network of 28 dedicated shuttle services.

The Gemini alliance replaces the traditional “string” model with a hub-and-spoke design, where instead of calling at eight or nine ports along a route, large ships call at a few mega-hubs, where cargo is redistributed onto shorter feeder routes under a process called transshipment.

“If you have a string with nine ports and one gets disrupted due to a typhoon or congestion, the whole string is affected,” Mr Blicher said.

This is because under the string model, the same ship is required to call at every port on the route, so problems at one location can cause delays that ripple through the network. A ship that paused for seven days in China due to a typhoon, for example, might arrive a week late in Europe, offload late, and return late, disrupting dozens of supply chains downstream.

In a hub-and-spoke network, however, large ships stop at a few major hubs, allowing disruptions to be contained locally and main vessels to stay on schedule.

Transshipment, once slow and unpredictable, has also become more reliable, with technology enabling better planning and tracking, and containers to be transferred with clearer visibility for customers.

“Twenty years ago, if someone said they’d transload your container, you would have said no because it would take forever or get lost,” Mr Blicher said. “But we have since built processes so it’s now fast and highly reliable.”

Maersk is already reaping the benefits of this shift in strategy, its chief executive Vincent Clerc told analysts during the company’s latest earnings call in November.

Since it was fully phased into major East-West routes in the third quarter, Gemini has “broken some efficiency frontier”, allowing Maersk to unlock significant unit cost savings, Mr Clerc said.

With its on-time performance reaching around 90 per cent, compared with the industry average of just over 30 per cent, Maersk has also begun early discussions with customers about a potential reliability-linked premium, Mr Clerc said.

However, he stressed that the company would only move ahead once it demonstrated consistency through real-world disruption.

“We need a long enough track record that it unlocks value for shippers, that they can take buffer stock out. Only then can we capture some of that value.”

Mr Blicher added that Maersk is not a price setter and cannot simply impose a premium for reliability.

Instead, if shippers decide a more reliable service is worth paying slightly more for, that will be reflected in the market, he said, adding that Maersk will not introduce standalone fees but respond to customer demand for higher-value services.

Building a logistics hub in Singapore and Malaysia

Maersk’s growing focus on reliability through Gemini follows the shipping industry’s experience over the past five years, which Mr Blicher described as “a long succession of black swan events” that upended the stability global shipping had enjoyed for decades.

They include a weeks-long blockage at the Suez Canal after a 400m ship ran aground in 2021, Covid-19 shutdowns between 2020 and 2023, the drying up of the Panama Canal in 2024, attacks by Yemeni rebels on commercial ships sailing through the Red Sea, and tariff swings which have disrupted global supply chains in 2025.

At the heart of Gemini is Maersk’s transshipment and logistics infrastructure in Tanjung Pelepas, Johor, as well as Singapore, where the carrier now operates its largest hub globally.

Maersk has invested heavily in warehousing and inland logistics to support its shipping network and scale its logistics business here.

In November, it officially opened its largest contract logistics facility in the Asia-Pacific in Shah Alam, Selangor, boosting its warehouse footprint by more than 30 per cent in Malaysia.

In Singapore, its World Gateway 2 warehousing facility in Jurong West, which will be up and running in 2026, will connect port operations with Changi Airport to enable intermodal routing of goods. It will also support operations at World Gateway 1, currently Singapore’s largest automated and Customs bonded warehouse.

“We think of Singapore as a gearbox. Cargo passes through, but now we can speed it up, slow it down, redirect it or store it, depending on what our customers need,” Mr Blicher said.

Preparing for further volatility

Maersk is also investing in extending its regional network, with the November opening of a US$140 million (S$180 million) logistics centre in Shanghai’s Lin-gang area, marking one of the company’s largest warehousing investments globally.

These moves will help the carrier as the shipping industry looks at potentially resuming voyages through the Red Sea in 2026 after Yemen’s Houthi rebels in November signalled a halt to their strikes in the region following an October ceasefire in Gaza between Israel and Hamas.

On Dec 18 and 19, a Singapore-flagged Maersk vessel successfully transited the Bab el-Mandeb Strait and Red Sea under “the highest possible safety measures”, in a first step towards gradually resuming navigation along the East-West corridor via the Suez Canal and the Red Sea, Maersk said in a statement.

“Whilst this is a significant step forward, it does not mean that we are at a point where we are considering a wider East-West network change back to the trans-Suez corridor,” it said, adding that there are no other planned sailings currently.

The development comes after Maersk and Hapag-Lloyd said on Nov 26 that they have no timeline to resume Gemini sailings through the Red Sea due to ongoing security risks.

Maersk added that it will continue evaluating the situation and intends to resume trans-Suez transits when conditions permit and only once assessed to be safe and sustainable.

Whatever the case, for Maersk, proven, measurable reliability may soon become not just a competitive advantage, but also a product its customers are willing to pay for.