Maersk is edging closer to charging a premium for providing industry-leading schedule reliability as the carrier unlocks unit cost savings across its Gemini Cooperation network.

Maersk CEO Vincent Clerc said the carrier has “broken some efficiency frontier” as the Gemini network launched with partner Hapag-Lloyd in February was fully phased in on east-west trade lanes during the third quarter.

“From a cost perspective, I think it’s a pretty significant lever that we have unlocked ... this has legs to continue into the coming quarters,” Clerc told analysts on Maersk’s third-quarter earnings call Thursday.

With its unit costs falling, Maersk is becoming more confident in discussions with customers about charging a premium for services that came with schedule reliability of about 90% in the third quarter.

While conversations with customers around a premium are already underway, Clerc said the current on-time performance would need to be sustained before such a charge could be rolled out.

“We need to be certain that we have a long enough track record that it unlocks value for them [shippers], that we can then capture some of that value for us,” he told analysts.

“For instance, today every customer has buffer stock, and that reliability needs to unlock a reduction in that buffer stock,” Clerc added. “They need to trust that [Gemini] has weathered sufficient ups and downs and is steady [so] that they can take out some of that buffer stock.”

Tapping into savings

If shippers could pocket those savings, Clerc said Maersk would be able to tap into those savings in the form of a premium.

“That process is starting. It’s a long-haul process, but certainly where we see some potential to capture value,” he noted. “Not everything [in Gemini] is fully in a place where value has been unlocked, but we are very positive with the discussions so far."

Clerc said from a unit cost perspective, he would need one or two more quarters of data from Maersk and its rivals to see who was holding the upper hand. But the CEO was confident Maersk would remain in front.

“What we can see with the numbers that have been released so far is that we’re making more progress on unit costs than what [competitors are] making, and we attribute this to Gemini, which is the big thing that we did to lower our unit costs,” he said.

“We’re quite positive that with Gemini we’re opening a gap now that is going to be quite handy, especially in the current rate environment, and we will continue to work at making it as big as possible,” Clerc added.