Will Alibaba tie-ins end in tears?
A lot has been made of container liner operators teaming up with China’s online trading site Alibaba. Among recent announcements have Hapag Lloyd, Evergreen, Maersk Line, CMA CGM and Israel's Zim. Almost all of the liner operators mention the increasing number of small size fragmented orders from global buyers as the reason for linking with Alibaba. While many see this as an example of what is being called disruptive action, and others as an indication of what digitalisation is all about, the results of any link ups may be a little below expectations. Searching Alibaba’s website throws up over 300,000 options for Logistics – Sea Freight. That is an astonishing number but even if it is assumed that sellers on Alibaba restrict their own options to certain selected shipping lines, it is doubtful if they can offer options for delivery to every possible global destination from just a small list, so services from third parties beyond the lines themselves will be needed to keep the wheels of commerce turning. No doubt the shipping lines in question will expect to see some increase in business from their tie ins with Alibaba but the stark reality is that until Western consumers can increase their own purchasing power, the amount of goods – and therefore the number of ships needed to transport them – will not increase. There is also the very real possibility that of some of those 300,000 search results offering their own expertise in arranging shipments will see the lines’ actions as a threat and choose to use competitor lines instead.