Maersk bets vertical integration will win the Last Mile

Without connectivity across the supply chain, visibility can break down at every handoff, making it harder to identify where problems originate and how to address them before they reach the customer. Last-mile delivery sits at the end of the supply chain and functions as a domino effect. That is, any upstream failure surfaces there first, with nothing left to catch it once the package reaches the customer’s door.

Johnson framed the stakes in terms of what the customer actually sees. “The final mile is the part that’s visible to the end customer,” Johnson said. “They don’t see the Maersk vessel coming across with their freight. They don’t see the pickup in China. They see that last-mile delivery. So we need to better understand: Is it actually a last mile problem, or what can we do to improve that overall customer experience?”

Vertical Integration in the Supply Chain Pays Off

Maersk’s pitch to shippers goes beyond ground freight. Shah described a customer relationship that starts in Vietnam and handles its shipment with Maersk.

By bringing those functions together Maersk aims to reduce the information gaps that often emerge between transportation providers, warehouses and delivery networks. Rather than managing multiple vendors independently, customers gain a more connected view of inventory, shipments and final delivery performance, enabling faster issue resolution and more proactive communication when disruptions occur.

Johnson said that end-to-end connection is becoming a market differentiator as consumers increasingly buy from overseas sellers and expect to track the full journey. “As we connect our systems from end to end in the supply chain, now there becomes that global visibility,” he said. “The customer’s anxiety is reduced the more visibility we give them.”

For many retailers and brands, the challenge is no longer simply moving products quickly. It is providing a consistent and predictable experience for end customers while managing growing complexity across sourcing, transportation, fulfillment and delivery. As expectations for visibility continue to rise, supply chain leaders are increasingly evaluating how connected their logistics networks are from origin to final delivery.

Shah tied that visibility directly to supply chain management. “The more elements of a customer’s supply chain that we can manage, the more proactive we can be in communicating to both our customer and the end consumer.”  Johnson added that consistency is the goal regardless of geography: “We want to provide the same delivery experience in Seattle, Washington, that we do in Richmond, Virginia, and we can only do that by connecting every portion of that chain.”

MEC and MGF: Combined Arms Under One Brand

Maersk splits its North American operation into two units that Shah said function as one. Maersk E-Commerce (MEC), which Shah leads, handles last-mile delivery. MGF, under Johnson, covers LTL (less than truckload) and FTL (full truckload) ground freight.

“We just have different acronyms, but from the customer point of view, it doesn’t matter,” Shah said. “A lot happens behind the scenes, but the customer experiences one integrated solution.”

Johnson said the branding is deliberate. “It is definitely a competitive advantage, and that’s why when you see our branded vehicles or branded ships, they’re all different modes of transit, but it’s all Maersk,” he said. “I handle the heavier, bulky shipments, and Prashant’s group has the smaller parcel, and those groups work behind the scenes to say, ‘These are the best avenues of transit.’”

From 3PL to 4PL: Managing the Last Mile at Scale

Rather than build its own last-mile delivery fleet, Maersk manages a pool of carriers on customers’ behalf.

“We have multiple carriers that work with us,” Shah said. “So our customer can have a single point of contact with us, but we are using a multi-carrier model for them, managing it with single API integration, one communication and one customer experience for all of their end customers. If service issues arise in a region, we can adjust carriers behind the scenes so the customer experience remains consistent.”

“At the end of the day, customers don’t care how many handoffs happen behind the scenes,” Shah said. “They care that their product arrives when promised and that they know what’s happening every step of the way. Our job is to make that experience as simple and predictable as possible.”