Dive Brief:

• Maersk Line will soon be competing against air cargo for transporting the pharmaceuticals and perishables markets, The New York Times reported reported Monday. Currently, less than 20% of pharmaceuticals are being shipped by sea due to the products' high value and strict handling requirements.
• However, the shipping line recently completed retro-fitting its 270,000 refrigerated containers with a new Remote Container Management (RCM) tool, which would allow the line and shippers to closely monitor temperature. With the new tool, Maersk hopes to transport one million reefers each year.
• Maersk seeks to make the tool commercially available by the end of the month, The Coolstar reports. In its six-month pilot project this year, RCM helped Maersk spot 4,500 incorrect temperature settings — 200 of which would have caused product loss — on customers containers, Fresh Produce Journal reports.

Dive Insight:

Maersk's new visibility tool will help the shipping line achieve its goal of becoming a full supply chain service provider, while additionally helping it break further into the valuable cold chain market.

Shipping lines have traditionally struggled to gain market share in cold chain transportation, given the long lead times and lack of visibility previously synonymous with ocean cargo. As a result, shipping lines dedicated only a small fraction of their capacity to refrigerated cargo. But new innovations like RCM, a growing demand for visibility across supply chains, and years of financial losses prompted lines to reconsider their revenue streams. 

Given these needs, the shipping industry seems to be betting on the cold chain's potential. In 2016, Maersk announced it had ordered 14,800 new refrigerated containers, complete with Internet of Things (IoT) technology to ensure visibility. Hapag-Lloyd is not far behind, having ordered 5,750 cold chain containers around the same time. Meanwhile, ports are also investing more in refrigerated warehouses to ensure proper storage upon import.

Of course, the shipping industry's stakeholders are acting in accordance with the goal of increased revenue. Recent surveys show cold chain investments have a high ROI, given an increasing demand for fresh products, and that shippers prefer carriers and third-party logistic providers who can offer a wide range of shipping options.

Given these market trends, Maersk is angling to transform itself into a full supply chain service provider, similar to UPS and FedEx. In its bid to expand its service offerings, the shipping line has partnered not only with IBM to digitize the paper trail through blockchain technology and better track containers as they pass through the supply chain, but also with Alibaba, where users of the Chinese e-commerce company's OneTouch booking website will now allow them to reserve cargo space in advance. 

"[2016 was] a year when we decided to substantially transform A.P. Moller - Maersk for the future," CEO Soren Skou said in February, when the company announced it would replace its chairman. The push for digitization, new service offerings, and expansion into the cold chain market are but the realization of this transformation.