A.P. Moller - Maersk

Naud Frese

Digital Logistics Pathfinder

As a Head of E-Commerce Logistics at Maersk, Naud Frese is responsible for creating customer-first E-commerce Logistics solutions which enable customers to enhance conversion and retention in their E-Commerce Sales. 

What are your views on the current importance placed on digitalization and customer-centricity in e-commerce logistics?

Due to mandatory quarantine, a lot of people were confined, which led to a surge in e-commerce and accelerated digital transformation. People started buying online a lot more than ever. That digital growth has significantly impacted the supply chains of our customers. So, it became challenging to understand which inventory I could sell to my customers. That’s the first challenge. 

The second one is that it is harder to predict from where demand will come. Earlier, when we used to sell a lot through retail, it was relatively easy to predict the demand. If retailers can't sell the products, they will make a big sale at the end of the season to get rid of them. With online sales, that's harder to predict how I can get a supply chain that supports agility toward my customers.

The third thing is to drive the right customer experience. Because it's harder to predict, make sure once a person starts buying online with you and stays engaged. We call it NPS (Net Promoter Score). To drive better customer experience, it’s important to allow customer’s track their parcel, which includes knowing when the package will arrive and whether it is secure. For that, you have to integrate with last-mile carriers. But the challenge here is that you have to deal with so many data flows as a CIO because you have to activate the data and then set up the logistics along with that. If you fail to do that, it might give the customer an opportunity to choose another brand to buy the same stuff. Usually, these brands try to connect directly to the customer to earn more margins which are not possible through retailer or e-tailer. That’s the top priority for any CIO. If any brand sells through an e-commerce website, it won’t be able to know who the customer is. Only e-tailers can start retargeting customers through different channels, saying they have offers for them. So, it’s necessary to get the inventory in the right place and make sure to drive the right conversion to NPS and Satisfaction to the customers. 

How prepared are you to face and overcome these challenges? 

At Maersk, we tried to bring more agility for our customers to make their supply chains more resilient, collaborative, and networked. It sounds easier said than done. Having control over assets like technology, data platforms, people, or warehouse, we can actually provide our customers the right agility to move their supply chain. Therefore, we have heavily invested and still investing in technology to make sure it lifts all those assets. I believe we can control both the technology and the actual hard logistics at the same time.

Moving into 2023, customers are now more concerned about climate change and minimizing their carbon footprint. Could you talk to me about the steps and strategies that you have taken to reduce the carbon footprint throughout the logistics?

First and foremost, Maersk believes in utilizing greener vessels and fuels and putting solar panels in our warehouses. So, we heavily invest in everything that makes the assets of the supply chain greener. That’s not easy to change the industry perspective to commit to carbon-neutral shipping by 2040. Therefore, we are investing in new technologies to make that happen. The fact is, when we talk to customers about a greener supply chain is actually tell them more about the data. Because just putting a greener vessel is not enough; we need to reduce the carbon footprint by utilizing data to understand the actual journey of a product while moving from the factory to the customer. Take steps to make that journey more efficient. Hence, we intend to make our assets greener but also to work with our customers on a greener, more sustainable end-to-end factory-to-customer supply chain.

As the head of logistics, can you elaborate on some of the technical implementations that you brought forward?

We always tried to make logistics more configurable by not all customized, but that can create efficiencies for our customers. That configurability only exists when you have data from all the systems that are used in the supply chain to the final outcome. Now, if you want to deliver that to customers, make sure that the data is harmonized. That's where we put a lot of effort into making sure that those systems talk to each other in a harmonized way. If there's less inventory stuck in the supply chain, the company needs less working capital, which immediately hits its bottom line result. The data harmonization is what we drive to have from source, but also to make sure that we have the connectivity through our APIs with the systems that our customers use to make sure that they either talk to vendors or they talk to their consumers.

Can you explain some of the major factors that are being used to build real new platforms for the expansion of logistics and e-commerce?

I think the promise of e-commerce is boundless as it allows selling anything anywhere. But it requires three main factors. The first step is marketing to identify our competitors and the needs of our customers. Second, be sure to use a supply chain to manufacture the product and introduce it to the market. The third is to ensure that your logistics are properly set up to promote conversion and retention in online sales.

Because if the customer has a negative experience, like the goods are expensive to return and take 25 days to arrive, they will not order from the same company again. To ensure that customers buy, refer, and buy again, it is important to have the rights of conversion and retention in online sales. Therefore, e-commerce has limitless potential, but it requires a lot of effort.

What is your advice for other senior leaders working in the logistics sector?

The only piece of advice I have is to understand customer behavior. We deal with many customers on a daily basis, both internally and externally. But do we know them or their requirements in the future? For instance, the Pandemic has demonstrated to us how quickly consumer behavior has evolved or changed. Therefore, you must get that aspect right if you want to achieve the kind of steady growth you seek.