MARKET SHARE OR MARGIN? YOU CAN HAVE BOTH.

OCEAN SHIPPING INDUSTRY PERSPECTIVE

As the Ocean Shipping industry continues to evolve, it is no longer an option to solely focus on cost reductions to solve the systemic challenges that exist for carriers. In the wake of continued consolidation and partnerships, stronger competition will continue to be a way of life while increased price transparency will continue to commoditize services that have historically been profitable. Not to mention capacity and demand imbalances will continue to exist all while your bunker rates are constantly in flux. The combination of all these industry trends has created a persistent drag on shipping rates globally. 

Do you know which of your trades are most responsible for the downward pricing spiral? Do you have the analytics and tools necessary to make the right pricing and inventory decisions? Most importantly, are you falling behind your competitor’s digital capabilities as they advance towards data-driven decision making? 

Developing and successfully deploying solutions that eliminate these unknowns could be the difference between being a market leader or the next Hanjin Shipping.

WHAT'S YOUR PAIN POINT?

“We’ve extrapolated recent decisions that involved [Pricing Framework] usage into annual figures and this equated to 3% revenue uplift!”

HEAD OF PRICING, A GLOBAL TRANSPORTATION & LOGISTICS COMPANY

Ocean Shipping Value Proposition

NETWORK PLANNING

Are you struggling with what ports should be called to meet demand, while maximizing revenues and profitability? It’s a challenge for ocean carriers to quickly pivot their network as needs change. We can help you allocate capacity, which is a critical decision when determining your network strategy. By applying advanced analytics through forecasting and data-driven network planning, we can help you make better business decisions.

ASSET MANAGEMENT

Are you grappling with where your ships should best be positioned, and also how you can leverage them to drive both operational efficiency and commercial performance? We can help you plan for future demand to ensure your containers, especially reefers, are where they need to be and at the right time using advanced analytics and predictive modeling.

DEMAND PLANNING

Are you using world-class forecasting components to calculate demand at a level of granularity that you can actually make decisions on? Forecasting only at a trade level is not enough to inform accurate decisions. With our suite of forecasting models, we can help you understand demand seasonality and the impact of special events to better inform downstream decisions at an origin/destination, equipment type, and departure week level.

LONG-TERM CONTRACTING

Are you using pencil and paper or Excel to manage the complexity of long-term contracts? How do you decide the opening price for your negotiations? Do you know how customers will respond to that initial proposal? Do you know what kind of volume fulfillment will follow if customers take a given rate? Or, do you even know the fulfillment of a customer’s previous contract? We can help you answer these questions, as well as help you understand how to price in a way that maximizes the value of your long-term contracts.

SPOT-MARKET PRICING

With the excess capacity in the market, downward pricing pressure is a consistent problem. But how low do you need to go to win business? How do you avoid the spiral-down effect and a “race to the bottom”? Do your markets or your customers drive price? How does price sensitivity differ across customer segments and geographies? We can help you understand what your optimal pricing should be, while leveraging internal and external data sources to explicitly measure the relationship between price and demand at a granular level. With your end-goal in mind of improving pricing decisions, we help you eliminate the unknowns without increasing risk.

SALES TEAM MANAGEMENT

Even when equipped with the right price for the right customer, is your sales force as effective as it should be? Are your sales incentives aligned with pricing, and do you know if you’re rewarding your top performers? We can help you solve for all the variables, even the human ones, to align your sales incentives with your pricing, so that your sales force is empowered to make better business decisions.

CAPACITY PLANNING

Excess capacity is plaguing the Ocean Shipping industry. Intelligent decision-making regarding deployment of capacity is increasingly important when determining where and how to compete. Do you question what physical assets are required to meet demand to maximize revenues and profitability? Do you know at what rates customers will cancel or no-show? Or, do you make trade-offs based on where these assets are best positioned, and how they are best leveraged to drive both operational efficiency and commercial performance? As you know, reduction in capacity for asset-heavy industries can be a long and involved process. What happens when demand returns? We can help you allocate capacity and understand materialization rates, improving critical decisions when determining your network strategy. Applying advanced analytics through forecasting coupled with data-driven network planning can help drive decisions.

BOOKINGS MANAGEMENT

Just because you’ve won the contract, doesn’t mean you should accept every customer booking. How does your forecasted demand impact your evaluation of bookings? Do you wonder what higher-yielding business you could be displacing by taking a heavily-discounted customer’s business? We can help you double-check your gut check and understand if the price is too low for a specific date or route, and what alternatives you can offer your customer. Is it a different time, or alternate itinerary? Knowing what you don’t can allow you to both accommodate the customer and retain their business, while simultaneously increasing utilization of available capacity.

OPERATIONAL EXECUTION

Within the transportation and logistics industry, making the right commercial decision is only part of the problem. That commercially-optimal decision must also fit within the operational constraints of the overall network. The tug-of-war between operational efficiency and profitable business is ever-present. How do you balance these two critical objectives? Is your network optimally configured to meet customer demand? How do you balance the operational need to move empty containers with the goal of utilizing capacity with the highest yielding cargo? How can you optimally leverage your route network to maximize utilization and profitability? We can help you answer the questions that are holding back your growth.

HELP ME BUILD A BUSINESS CASE FOR CHANGE

Change is hard, but it doesn’t have to be, but we can make it easy for you. After all, if your product (or service) has a price, you can use Revenue Management. That said, we bring deep industry expertise, and can help you solve for the unknowns. Click the button below to ignite change within your organization.

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