One of the world’s top carriers, Hapag-Lloyd, is foreseeing a major increase in online sales in shipping industry. This is no surprise since we have watched how companies in this business are now adapting to this new digital era. This carrier has big plans for 2023 and is going all for it.
Online sales in shipping are a bit of a new thing. For a while now, we have heard about how companies in the business are going digital, but to find real-time shipping rates is actually recent and we can only do it through two of the top carriers: Hapag-Lloyd and Maersk Line.
The reason is that all of the rates’ information is complicated to manage since ocean carriers use different formats and names. Although they are already working together in the standardization of data communication, this is a slow process that will surely take some time to be implemented.
Nevertheless, Hapag-Lloyd presented in the 2018 annual report a rapid increase in its online sales through Quick Quotes. This has given us the chance of having a good idea of the potential size and scope of online sales in the shipping market.
Currently, Hapag-Lloyd’s Quick Quotes webchannel represents 6% of the total sales. This growth took place within just one year, which shows the big potential of online sales in shipping. They are aware of that, so the company is aiming to sell online 15% of the total volume by 2023.
Should all carriers bet on online sales in shipping too?
The data Hapag-Lloyd presented gives us an estimate to work on some predictions on the size of the online sales global market. Lars Jensen, an expert in the container shipping industry, explains it really well:
“If we take the 15% to be an indicator of the overall freight market’s willingness to simply procure freight online through a web channel directly with a carrier, we can therefore also assess the total online freight market. According to Container Trade Statistics, the global market in 2018 had a size of 168 million TEU. If we assume 4% annual demand growth in the coming years (that is assuming we do not run into a recession), this leads to a total market size of 204 million TEU in 2023. With 15% being sold online, this indicates a market size for the online freight companies of 30 million TEU.”
And this is just an approximation of the results that online sales in shipping can provide. Imagine how this could actually change this industry. Of course, many customers will still use freight forwarders’ service, but they will too get profit of the real-time shipping rates availability. It could help them improve the customer experience they offer.
Anyway, something is for sure: the digital revolution in international shipping is unstoppable. At Cargofive we want to help this transformation to be much easier and faster, especially for freight forwarders. But, it is now up to the industry players to wake up and be part of it, or to be left behind and out of the market real soon.