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Alibaba Partners Maersk for Online Booking of Cargo Space

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In its latest push into logistics, Alibaba Group Holding LimitedBABA has reportedly sealed a partnership with Maersk, a unit of Denmark's A.P. Moller-Maersk and the world's biggest container shipping line, to offer online reservation of space on Maersk's vessels. The service eliminates freight forwarders from the booking process and limits their services to haulage.

For the last one year, the stock has outperformed the Zacks Internet-Commerce industry. It has returned 15.11% compared with the industry's return of 12.10%. The stock jumped 2.16% in yesterday's trading.

Per a Reuters report yesterday, Maersk has commenced this service on Alibaba's OneTouch booking website on Dec 22. As a part of the initial plan, OneTouch will offer advance booking of cargo spaces on selected routes from eight Chinese ports against a pre-paid deposit. The platform offers export services such as logistics and custom clearance and is the fastest growing part in Alibaba's business-to-business division

The news also highlighted Maersk's plans to initiate more pilot programs on third party portals as it aims at digitizing customer services.

Alibaba Steers Toward Logistics, Raises Game Against Amazon

The move underscores Alibaba's growing interest in the global logistics business. The company has been exploring this space with investments in couriers and warehouses in the recent years. It has opened its own logistics service known as Alibaba Logistics.

Recent news from Reuters, Bloomberg and others show that Amazon's AMZN Chinese arm (Beijing Century Joyo, which it acquired some years back) has filed with the authorities as a handler of goods bound for ports in Japan, Europe and the U.S. In the U.S., it is registered as an ocean freight forwarder.

Amazon has been investing heavily in fulfillment centers, trucks and containers and its Fulfillment by Amazon (FBA) service has been doing well. It recently bought some planes and also has self-designed drones in the works.

However, since Alibaba does not hold its own inventory, it has more freedom compared with Amazon to invest in its own infrastructure that expands from logistics to payments.

ALIBABA GROUP EPS Diluted (TTM)

ALIBABA GROUP EPS Diluted (TTM) | ALIBABA GROUP Quote

The company is leaving no stone unturned to extend its e-commerce reach to mobile, video and distribution business with its eyes now set on China ships.

Our Take

Timeliness has become one of the most important factors in the e-commerce space. As competition intensifies, Alibaba needs to up its game. With the integration of its own logistics service platforms, Alibaba could build a solid logistics platform for small and medium-sized Chinese businesses.

Zacks Rank and Stocks to Consider

Currently, Alibaba is a Zacks Rank #3 (Hold) stock. Better-ranked stocks in the broader technology sector include NVIDIA Corporation NVDA and Control4 Corporation CTRL , each sporting a Zacks Rank #1 (Strong Buy). You can see the complete list of today's Zacks #1 Rank stocks here .

For the current year, estimates for NVIDIA and Control4 have gone up by 30.6% and 2.3%, respectively.

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.


The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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