“The strategy moving forward is to create a global customs brokerage offering that we can use to support large multinational corporations, predominately those based in Europe and the U.S. We can develop global capabilities or in-country specific capabilities,” Hammond said.
“We’ve got a road map in place today that will direct our timing and how we go about this in different parts of the world,” he said.
Every container carried on a Maersk ship, he noted, “has an import customs clearance and most of them have an export customs clearance — not all countries require export customs clearance, but the majority do.”
So customs is “a service that’s in demand 100 percent of the time. Navigating those complexities is something that a customer needs no matter what part of the world or what country we’re operating in. So it’s a natural evolution that we expand our capabilities to be able to seamlessly handle containers in and out of customs jurisdictions around the world.
“We expect to grow this business substantially. We expect it to be an important part of our offering and an important part of our revenue in the years ahead,” said Hammond.
“We expect in Europe that we will be looking at some acquisitions and some organic growth in certain countries in Europe,” he said. In Asia there are “a whole different set of challenges with this service in Asia and I expect we’ll be doing more internal investment in Asia with strategic acquisitions that may make sense for us.”
Hammond noted that “customs brokerage is often referred to as a sticky service. It is a trusted adviser relationship. Customers have a tendency of staying with the same provider for longer period of time. That’s part of the other attractiveness for us.”
He said there are different types of buying behavior by container shippers and Maersk plans to offer customs service to all.
At one end of the spectrum are shippers are focused on simplicity and ease of use. For example, an importer that only does business in the U.S. and imports only from China and Thailand and uses a single liner company might be interested in having a single entity responsible for the end-to-end delivery of its containers, including customs work.
“In a case like that, they’re going to use a multitude of transportation providers to move their goods around the world,” said Hammond. But such a company “would likely be interested in having a fewer number of customs brokers that would control all of these activities.”
That decision is often “based on risk and exposure and compliance and the ability to manage various customs brokers around the world.”
Hammond said the customs regulation is becoming more complex. In the U.S. that is partly driven by the trade war with China, changing duty rates and preferential tariff agreements and in Europe the unknowns surrounding Brexit.
There is also the pressure of complying with laws such as the U.S. Foreign Corrupt Practices Act and U.K. Bribery Act, which apply to companies around the world doing business in those countries.
“There is a high degree of sensitivity to this in the large multinational companies in Europe and the U.S., and they are placing more emphasis on these services,” Hammond noted.