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Maersk has announced its entry into India’s trucking services by tying up with an aggregator, BlackBuck, which has some 300,000 open trucks on its platform. The tie-up with BlackBuck will help customers of Maersk book containerised trucks to carry export-import containerised cargo within India.
Globally, Maersk, a company known for its shipping and port terminal services, has already announced its plans to get into the land logistics space. It has a similar tie-up in the US with Loadsmart, Sriram Narayanasami, Head-Commercial Process and Vice-President, Maersk, told BusinessLine.
The new platform will be owned and operated by BlackBuck, with Maersk supporting the company to develop industry-specific solutions. BlackBuck will be paid on a shipment basis, Ramasubramaniam B, co-founder & COO - Strategic Initiatives, BlackBuck, told BusinessLine .
The neutral platform will be open to the whole industry. Its aim is to reduce touchpoints in the supply chain and improve customer experience, match demand-supply through the year and provide consistency in service delivery through real-time visibility and control.
While there is huge scope for business in India, the two companies together plan to expand the service to other neighbouring countries in South Asia. India has set a target to reduce logistics cost from 14 per cent of GDP to less than 9 per cent by 2022.
Announcing the collaboration with BlackBuck, Arjun Maharaj, Head of Sales, Maersk South Asia, said, “Our customers are dealing with fragmented vendors with varying service levels of communication, geographical, financial and infrastructural disparities, resulting in sub-optimal supply chains. At Maersk, we have committed ourselves to working with partners who understand these challenges, match our set of values and have expertise in both logistics and technology.”
BlackBuck has been one of the movers in bringing the offline operations of trucking online – from matching a shipper with a trucker or reshaping the infrastructure around trucking to facilitating payments, insurance, and financial services.
Ramasubramaniam B said BlackBuck has developed a robust product and technology that maximises the billable kilometres of a truck, delivering higher realisation to the truck owners and driving a low-cost transportation network to the shippers. “ Maersk, with its industry-specific knowledge and expertise, will help us transform this space through digitisation.”
Maersk has set out on a digital transformation journey and amongst various other initiatives globally is the India-focused OceanPro accelerator programme, which was launched in 2018. The solutions developed by a few of the start-ups in the first cohort of OceanPro, are already being implemented through various services to accelerate technology innovation in the shipping and logistics industry in India and globally. The company launched the second cohort of OceanPro in July this year, with a group of five start-ups.
“At Maersk we are collaborating with such start-ups that will help us solve land-side logistics challenges in India by not only reducing costs, but also creating efficiencies for all the stakeholders in the value chain,” says Bhavik Mota, Head of Product, Maersk South Asia.
Partnership to acquisition
The partnership may lead to Maersk acquiring a stake in BlackBuck or this particular arm, but nothing is on the radar right now.
“BlackBuck is extremely well funded, highly valued, and, after this partnership, the valuation will probably be so high that (even) we cannot afford,” joked Maersk’s Narayanasami, declining to answer in “yes or no”.
That said, Narayanasami added that Maersk’s growth arm, which functions like a VC fund and invests in exciting businesses within logistics, will consider valuing or investing (this business), just like it does in other businesses. “Maersk aims to provide a diverse set of services, including ocean, inland, customs house brokerage, trade finance, cargo insurance, cold chain. We have also come to a humble realisation that we can’t buy it all. But, we will buy equity stake in some,” Narayanasami said.
BlackBuck’s Ramasubramaniam B said this partnership is more about creating solutions for the sector. He added that investment is not on the radar right now and if that were to happen in future, it would be evaluated by the valuation teams of both the firms. BlackBuck’s current investors include Accel Partners, Apoletto Asia, B Capital, Flipkart, Goldman Sachs, IFC, LightStreet, Sands Capital, Sequoia Capital, Tiger Global and Wellington.
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