Maersk Line’s Huawei deal earned with time

A long-term deal with the world’s largest telecommunication equipment provider, Chinese Huawei, solidifies Maersk Line’s relationship with an important customer and underlines the importance of relationship building in growing markets where the next generation of global brands is growing fast.

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As Huawei’s customers also impose high expectations on Huawei for timely delivery of the products, so Huawei depends on a reliable and proactive transport provider with high on-time arrival capabilities in order to fulfil these expectations. In meeting this requirement, Maersk Line not only guarantees access to, and space for Huawei cargo on its ships with the new contract, it also provides Huawei with a dedicated customer service team that it can reach at any time.

In 2003, when Maersk Line began carrying cargo for Huawei, the brand was not well known outside of China. And sales were less than USD 5 billion. Twelve years later, it is the world’s largest telecommunication equipment provider and third largest mobile phone manufacturer with 170,000 employees and more than USD 50 billion in sales.

“One of the reasons for Huawei’s success is that we are helping them protect their reputation as a trusted brand with a contract that has on-time-delivery and proactive, dedicated customer service as its top priorities. I think this contract shows that we’ve earned their trust as a long-term partner in their logistics chain,” says Daisy Yuan, Huawei Key Client Manager in Maersk South China.

Custom fit for Huawei’s needs

According to Daisy Yuan, Huawei is highly focused on their customers’ experience. Huawei’s customers also impose high expectations on Huawei for timely delivery of the products, so Huawei depends on a reliable and proactive transport provider with high on-time arrival capabilities in order to fulfil these expectations. With the new contract, Maersk Line guarantees not only access to, and space for Huawei cargo on its ships, but also a dedicated customer service team they can reach at any time.

“They are Care Premium customers and our agreement with them gives them two dedicated customer service contacts in Shenzhen and round-the-clock access and support. They can reach us anytime, but most importantly, we will contact them with alternatives if there are delays or disruptions,” says Daisy Yuan.

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“One of the reasons for Huawei’s success is that we are helping them protect their reputation as a trusted brand with a contract that has on-time-delivery and proactive, dedicated customer service as its top priorities.” says Daisy Yuan, Huawei Key Client Manager in Maersk South China.

“Made in China” takes on a new meaning

With the change in China's economy and trade, Chinese companies are aligning themselves with global business partners, such as Maersk, who can provide services beyond normal logistics, so as to develop their brands on the global stage.

The contract between Maersk Line and Huawei is a 3-year deal with an option for two more years. It ensures Huawei has the ocean transport it needs to feed a supply chain, which begins in Shenzhen, China with goods that are subsequently shipped all over the world.

The contract is one of only a handful of long-term contracts Maersk Line has with customers. Last summer, Maersk Line signed a 10-year deal to ship 2.5 million export containers for New Zealand’s Kotahi. By the end of 2016, that deal will include regular calls to the Port of Tauranga with much larger ships (6,500 TEU) than those currently serving the port.

Vincent Clerc, Maersk Line’s Chief Trade and Marketing Officer, says Maersk Line is not trying to move all its customers to long-term contracts, although he would like to see about 10% of Maersk Line’s 9.5 million annual container volume represented by contracts of three-years or longer.

“Long-term contracts allow us to make a long-term investment in a market and it helps us build a much stronger relationship with that customer at hand,” says Clerc.

“While it gives us a lot of confidence and flexibility knowing that we have these committed volumes, it also shows other customers and potential customers in a given market that this service is not going away, and that they can count on our service to the area.”

Tracking the next big brands

Huawei’s rapid rise in China and subsequently overseas is a reminder to Maersk Line’s local organisations to their keep ears to the ground and recognise the next generation of big brands early on in their growth.

“We have a huge focus on expanding our footprint among local companies in India, China and Latin America so that we don’t have to rely solely on our traditional European and American businesses,” says Clerc. “Future Champions is what we call up-and-coming local businesses. Some of them will no doubt be our biggest customers in 10 years’ time, so we want to earn those relationships now.”