The port claims they are seeing a rush of container deliveries; perhaps it’s a presage of Brexit starting January 1, or simply a rush of winter orders. But this was entirely foreseeable. I guess their eye wasn’t on the ball for this crisis.
Imposing the ban was clearly a mistake, and a shock. It only took a couple of days for port management to realize they had screwed up the supply chains of everyone using the port.
It’s typical of IT projects to ber late or never get finished. Here we seem to have an example that is severely impacting everyone else in the supply chain.
Here at Felixstowe, you can’t return empty containers. You have to return them inland, at considerable extra cost and expense. It’s England, so the truckers are companies, and they can pass their costs along.
If this were the US, the individual owner-operators would have to take the expense, because they get a piece rate for a trip, regardless of where they have to return the container. they would have no way to pass on the cost. We see similar debacles occasionally at US ports.
It’s clear that Maersk is making bets as a venture capitalist on young firms with unique value propositions. They have made an investment, via Maersk Growth, in ZigZag, a London-based firm.
I had never heard of ZigZag before. They offer a SaaS (Software as a service) that allows manufacturers and retailers to manage returns in a one-stop manner. Their services include hard logistics assets like access to warehouses and sortation centers and access to carriers, as well as just the software.
The story indicates some of what they do. We all know that returns are a unique type of operation, whose nature differs with the type of industry. HP has been doing it for many years in the printer division. But I was interested to find out that there is a lot of interest among clothing manufacturers or retailers.
Apparently people buy clothes, use them for a while, and then return them, even for no refund. There is also a temptation for retailers to get rid of stale inventory by simply throwing it in a landfill, a sustainability issue. Easy returns offers an opportunity for a firm that can handle these problems efficiently and in a sustainable manner. (I presume there might be an incentive to cheat; but certainly a specialist could do a better job because it’s their core business).
I doubt that ZigZag will be merged with Maersk. However, the bet makes sense when you understand that a lot of what Maersk carries is clothing manufactures from the Far East. If ZigZag can help these clients it could make a difference in the clients’ bottom line, and Maersk would be able to say they helped with the supply chain problems.