There is an evident boom of Logistics Company joining both the traditional logistics market and the logistics aggregation market since 2015. And we can see its visible impression in the recent collaboration.
However, before we jump into the article, we need to understand what is import export aggregation and how is it useful to the economy.
What Are Import export Aggregate Demand and Import Export Aggregation?
Aggregate demand is a financial measure of the total amount of demand for all finished goods and services in an economy. Aggregate demand is expressed as the full money exchanged for all those products and services at a particular price level and specific time.
Exports are products manufactured at home and sold abroad, and imports are products manufactured overseas but bought locally. As aggregate demand is described as expenditure on national products and services, expenditure on exports adds to aggregate demand, while spending on imports subtracts from aggregate demand.
Aggregate demand comprises of all consumer items, capital goods, exports, imports, and government spending programs. All factors are regarded as equal as long as the same market value is traded.
Two sets of factors can trigger shifts in import export demand: changes in comparative growth rates between countries and variations in relative prices between countries.
The level of demand for exports from a nation tends to be most severely affected by what happens in nations’ economies that would buy those exports.
Recent News: Maersk ties up with India’s Blackbuck for import export aggregation
Shipping major Maersk, together with domestic truck aggregator Blackbuck, is planning a move to create services to ensure optimal utilization of containers. Maersk is also open to investing in Blackbuck even though nothing is on the target list “right now”.
The tie-up with Blackbuck will help customers of Maersk book containerized trucks to carry export-import cargo inside India.
Internationally, Maersk, a company known for its shipping and port terminal services, has already revealed its plans to get in the land logistics space. Business line told it also has a related tie-up in the US with Loadsmart, Sriram Narayanasami, Head-Commercial Process and Vice-President, Maersk.
Blackbuck will be own and operate the new platform, and Maersk will support the business in developing industry-specific alternatives. Ramasubramaniam B, co-founder& COO-Strategic Initiatives, Blackbuck, informed BusinessLine that Blackbuck would be paid on a shipping basis.
The neutral platform is accessible to the sector as a whole. It attempts to reduce touchpoints in the value chain, enhance the user experience, fit demand-supply through the year, and offer better consistency in the delivery of services through real-time accessibility and control.
As there is vast potential for business in India, the two companies together intend to expand the service to other neighbouring countries in South Asia. India has set a goal to minimize logistics cost from 14 per cent of GDP to less than 9 per cent by 2022.
Arjun Maharaj, Head of Sales, Maersk South Asia, announced the cooperation with Blackbuck, said, “Our clients are dealing with fragmented suppliers with varying service levels of communication, geographic, economic and infrastructural disparities, leading in sub-optimal supply chains.
At Maersk, we have dedicated ourselves to work with partners who recognize these challenges, match our set of principles and have knowledge in both logistics and technology. ” Blackbuck is one of the movers in bringing the offline activities of trucking online–from matching a shipper with a trucker or redesigning the infrastructure around trucking to enabling payments, insurance, and financial services.
Ramasubramaniam B said Blackbuck had formed a reliable product and technology. It increases the overall billable kilometres of a truck by delivering higher epiphany to the truck owners. It also drives the shippers a low-cost transport network. “Maersk, with its industry-specific knowledge and skills, will assist us in transforming this space through digitization.” Maersk has embarked on a digital transformation trip and the India-focused OceanPro accelerator program, initiated in 2018, is one of many other projects worldwide.
The alternatives invented by some start-ups during the first cohort of OceanPro have already been implemented through various programs. The purpose of enforcing options is to accelerate technology innovation in the shipping and logistics industry in India and worldwide. The company launched the second cadre of OceanPro in July this year, with a group of five start-ups.
“At Maersk, we are teaming up with such start-ups which will help solve land-side logistics problems in India. It, therefore, helps in reducing costs and creating efficiencies. Bhavik Mota, Product Head, Maersk South Asia has said, it is going to be useful to all the value chain stakeholders.
The collaboration may give rise to Maersk purchasing a stake in Blackbuck on this specific arm, but nothing is on the agenda right now.
“Blackbuck is incredibly well funded, highly rated, and, after this collaboration, the market value will certainly be so high that even we cannot afford,” quipped Maersk’s Narayanasami, declining to answer in “yes or no”.
Narayanasami stated that Maersk is an arm of development. It works like a VC investment and invests in logistics in new companies. It will take into account appreciating or spending this business, just as it does in other businesses. “Maersk seeks to provide a variety of services including marine, offshore, customs brokerage, commercial finance, cargo insurance, and cold chain. We have also come to a modest realization that we are not able to purchase everything. But, we will acquire an equity stake in some,” Narayanasami said.
Ramasubramaniam B of Blackbuck said this collaboration is more about generating industry alternatives. He added that investment is not on the table right now, but if that were to happen in future, the valuation squads of both the firms would evaluate it. Current shareholders of Blackbuck include Accel Partners, Apoletto Asia, B Capital, Flipkart, Goldman Sachs, IFC, Sands Capital, Sequoia Capital, Tiger Global, and Wellington.
While aggregation helps to determine the general power of customers and companies in an economy, it reflects only total output at a specified price level. And so it does not necessarily indicate the quality of living standards. For this reason, we only hope to see a positive outcome from the aggregation between Maersk and Blackbuck.