6 points to help you compete in the

shipping and freight industry

16 August, 2018 by Hariesh Manaadiar Categories Freight, General, Opinion,
ShippingTags compete, differentiate, differentiation, Shipping and Freight7
Comments Estimated reading time = 13 minutes

Competition is one of the constants in business, something that can spur you on and
make you better or something that can bring you down..
Every industry has competition in varying degrees.. Some companies look at their
competition and say “Yeah ok, whatever” (think Google/Facebook).. Some
companies look at their competition and say “Oh crap, that’s close” – like a lot of
companies in the shipping and freight industry..
While competition comes in various forms, there are several cases where you may
really struggle to find a way to stand out from your competition..
Let me explain further with some examples relatable to the shipping and freight
industry..
 
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1) Take the global container shipping alliances as an example

These global shipping alliances account for almost 81% of the global container
shipping market and a customer shipping cargo anywhere in the world would have at
some stage or other used one of these alliances/alliance partners..
When using the lines within the alliances your cargo will be
 On the same boat (literally)
 Calling the same ports
 Takes the same time to get there
 Loads and discharges on the named day
 Follows the same route
 Experiences the same conditions or delays
 You may be paying more or less same or similar freight rate
+++
2) Take the South African Container Rail Freight as an example
Transnet Freight Rail (TFR) operates six major inland terminals and nineteen satellite
depots that are strategically located across the country linking the South African ports
to the main cargo centres..
Transnet has rail contracts with a few major container companies including shipping
lines and rail operators.. Most rail customers will be using one of these companies for
their rail movements
So if you are one of these rail customers, your cargo may be
 On the same train
 Calling the same rail terminals
 Taking the same time to get there
 Follows the same route
 Experiences the same conditions or delays
 You will pay more or less same or similar charges for the rail movement
+++

3) Take the process of shipping as an

example
In the process of shipping, your cargo/shipment will
 Go through the same shipping, clearing and forwarding process
 Documents will pass through same authorities
 Same documents/permits will be issued
+++
As you can see, there are many common areas with the same functions and as a
shipping line, intermodal operator, freight forwarder or other service provider in the
shipping and freight industry you should ask the question :
 
While there may be several methods of tackling competition, one of the proven
methods to compete in any industry is to DIFFERENTIATE..
 

What is the meaning of Differentiate or Differentiation..??

Noun :  the action or process of differentiating or distinguishing between two or more
things or people.
Technical : the process of becoming different by growth or development.
 
Here are 6 differentiators to help you compete in the shipping and freight
industry :
1. Service
2. Relationship
3. Reputation
4. Innovation
 5. Product
6. Price
1) Differentiation by service
While routing, transit, ports etc may be common, one main factor that will set you
apart from your competition and something that your customers look for is
SERVICE.. The pre-sales and after-sales service that you offer..
Make it easy to deal with you
 As much as you think this is a basic requirement, something as basic as this is
a “big” differentiator when it comes to customer service and customer contacts
 Am not sure how many of you struggle to find a simple telephone number on a
website of many companies.. I have seen many websites of companies where a
simple telephone number maybe buried a few pages deep or  all you get is a
contact form to fill up..!! How frustrating..
 While it is natural to go that route when you have 100s of offices worldwide, it
can still be made easier in a lot of cases..
 Ease of doing business with a company is something that a customer is always
looking for, so take the time, make the effort, be accessible and make it easy
for the customer to deal with you..

Make your process unique

 Have a different approach to your client’s problem, don’t treat your customer
as a number
 Show the unique benefits your client can enjoy by using you
 Differentiate your business model
 Give your customers a different business model to look forward to and work
with
 Develop your own unique business model which is not available in the market
(like a 24-hour access point for any port/customs/transport queries)
Offer value
 Whether it is a service or a product, customers are always looking for value in
their purchase
 There are many cases where customers will pay more for products or services
with value
 Find your niche and offer the best value that you can to your customers
Hire right
  Having the right personnel handling their business makes a big impact on your
client
 Show the customer you take their business seriously and nominate the right
person for the right job..
 Adding some high level subject matter experts to your team will create
confidence in your services
Train, train, train
 No, not the rail variety, the training variety
 Training is an important and integral part of differentiating your services
 In order to provide an exemplary service, your team must be well trained not
only in terms of your service offering, but also in terms of solving the
customer’s problems and meeting their requirements
 

2) Differentiate based on
relationship
 NOTHING beats RELATIONSHIP when it comes to sustainable business
development
 Many businesses survive due to the relationships that are created and
developed between the seller and buyer, service provider and customer etc
 Businesses based on relationships tend to last much longer than other
commercial or conventional businesses
 A big step towards this, is for you to be GENUINE in your approach to the
client, their business and an honest intention to assist with their requirements
 In some cases it may take years to cultivate the kind of relationship where the
customer gives you the business without asking what it costs because you have
created that implicit trust in you and your service.. Yes there are several
customer relations like this
 
3) Differentiate based on Reputation
 Having in-depth understanding of your market will establish you as an
industry expert and creates a reputation around you and your business
  This helps you maintain your
value in your industry
 This helps you gain credibility in your industry
 Reputational differentiation is an easy way to differentiate yourself in your
industry so people know to ask for you by name
Use your reputation
 You have created a good image and reputation for your business and yourself
through your high level of service, quality products, unique business model
and performance
 Use it to your benefit and that of your customer’s
Be a specialist
 All clients have various pain points in their business
 That is why they need a service provider or someone to provide a solution and
relieve them of the pain
 Specialise in solving a specific pain point in your client’s business.. For
example, there may be clients who are successful in shipping overseas but
have major problems in serving their clients inland in a particular continent
(example Africa) or country (example India)..
 So you could be an inland movement specialist who specialises in assisting
clients with this kind of pain.. Or you could be an Out Of Gauge or Abnormal
Cargo transport specialist..
 Specialisation helps promote your services further and get you more word of
mouth promo
 So don’t try to be a jack of all trades – be a master of one
 While this is usually successful if your field is rare, you need to keep
innovating to stay ahead as your competition is usually waiting to emulate
your success..
 Have a specific target market and be the best at servicing this market..
 Show case success
 Show case your success stories across all your marketing mediums (social
media, digital and print editions, blogs etc)
 Customers always look for success stories within your industry before
deciding or settling on a service provider
 So, if you got it, flaunt it..
 
4) Differentiate through Innovation
Which brings us to INNOVATION.. Probably the biggest buzzword to hit many
industries in a very long time, especially of late.. But it is not just a buzzword like
many others.. This is a serious buzzword..
The world is progressing rapidly and if you don’t innovate you will be left
behind.. Combine traditional service with innovative technology..
The shipping industry seems to have been innovating, but of course a lot still remains
to be done.. Here are some examples of Innovation in the shipping industry to inspire
you :
The shipping container
 Conceived by Malcom McLean and created by Keith Tantlinger in 1956, the
shipping container continues to inspire and evolve through the years..
 This innovation has helped bring the world closer and made globalisation a
reality..
 Container shipping has grown from 56 TEUs in 1956 to 22,202,904 TEUs in
2018 – an increase of 39,647,943% in 62 years!!..
Intermodal freight trains
 Your goods from China to Europe taking too long by sea..?? No problem,
there is an innovative idea for that.. It is called the Intermodal Freight Train..

 Read more about above example here..

 
Automated Container Terminals
Manual productivity at container terminals too slow for you..?? Ok, here’s an
innovation that will save you time and ensure productivity with no smoke breaks or
sick days..!! Automated Container Terminals..
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ULCVs
Shipping costs per container too much for you as a shipping line..?? Ok how about we
put a lot more containers on one ship to achieve economies of scale..??

The Triple E series (named Triple E due to its innovations in Economy of scale,
Efficiency and reduction of Environmental impact) of ships of Maersk Line starting
with MÆRSK MC-KINNEY MØLLER commissioned in 2013 with a capacity of
18,270 TEUs were widely considered as the forerunners of the ULCVs (Ultra Large
Container Vessel)..
The order book of UCLVs has grown dramatically since then with all major players
(Cosco, MSC, CMA-CGM, OOCL, UASC to name a few) entering the fray and as of
2017, the largest of these behemoths reported to have a capacity of 21,413 TEUs
(OOCL Hong Kong – currently the largest ULCV)..
If you are wondering where is the innovation in this, firstly, imagine a single ship
averaging +/- 400m in length, +/- 60m wide and +/- 73m high.. That is almost as long
as the 1st hole Par 4 at Augusta or the equivalent of a 4×100 meter relay!!..
Secondly, imagine a single ship capable of carrying TWENTY ONE THOUSAND
TEUs in one go..
Thirdly, imagine this big ship requiring only around 22 crew members (in some cases
less)..
 
Smart Containers
Not just ships, containers are also getting smarter.. Containers that can be tracked,
containers that communicates with you its data, its location, the condition of its cargo,
whether the power is on or off etc etc
Smart containers allow real-time monitoring of the cargo, including temperature,
humidity level and any other issues during transit..
 
5) Differentiate using your product


Product differentiation and innovation like above go hand in hand
 Product differentiation is a main form of differentiation and
 Those that have innovated are ahead of the pack
Have a distinctive but flexible strategy for your product
 Ok, this is not an oxymoron and yes it is possible..
 Our industry does not have a one size fits all solution for its problems
 So you should have products and business strategies that are distinctive to
you/your company but flexible
  A lot of big businesses don’t have strategies that are flexible and because of
this they may not be able to compete against the smaller but more agile
competition
 

6) Differentiate through price

 Drop the price and secure the business
 Although it may sound easy, it may not always be the case as the customers
are much too wary about “what you pay for is what you get”
 In some cases, this type of differentiation comes with a big compromise in
quality, something that some of the customers are well aware of
 In many industries including shipping and freight, this type of differentiation
doesn’t even need a sales department or sales person to secure business
 Anyone with a phone can contact customers, offer lower rates and secure
business
If you are wondering, why then I have shown this as one of the types of
differentiation, it is because this form of differentiation is probably the most popular
or most common in many industries.. In this day and age of depressed margins and
revenue, everyone is looking to cut costs and what better way than to get your
shipping rates as cheap as possible..
 
In spite of all above and as much as one may seem better than the other to
different people, the best way of competing would be to choose and combine all
the options available for you to differentiate and apply it strategically ad
selectively.. 
 Pricing & service
 Diversity of products & services
 Innovation & products
 Becoming an industry standard
Ok, you read and understood all of the above, and some of the points mentioned
above doesn’t come cheap.. So you may ask (or want to ask) “Ok, how do I know if
the differentiation is really worth it though..?? How do I judge that..??”
Well you can consider your differentiation to be worth it if
The difference
 Is valuable and the change provides a benefit to the customer that is more than
the cost
 Is important and the benefit that it delivers contributes to your customer’s
business success
 Is unique and offered in a distinctive and fresh manner
 Is better, quicker and superior in terms of technological innovation
  Creates an emotion in your customer, like a quick and effective relief of their
business pain
 Is tangible, recognisable and visible
 Is accessible and affordable to the customers who may be willing to pay the
extra to get the extra, and last but not least
 Is profitable for you and the benefit exceeds the time and effort you have put
into differentiating yourself
 
By differentiating yourself, you can
 Provide superior value to customers
 Create a powerful competitive advantage
 Give them a competitive price
 Boost the viability and profitability of your business
 Grow & enhance your brand and brand value
 
Adapting the famous words of Christopher McDougallin his book “Born to Run: A
Hidden Tribe, Superathletes, and the Greatest Race the World Has Never Seen”

Every morning in Africa, a gazelle wakes up.. It knows

it must outrun the fastest lion or it will be killed..

Every morning in Africa, a lion wakes up.. It knows it

must run faster than the slowest gazelle, or it will starve..
It doesn’t matter whether you’re the gazelle or the lion in the shipping and freight
industry..
WHEN THE SUN COMES UP, YOU’D BETTER BE RUNNING AND
DIFFERENTIATE IF YOU WANT TO COMPETE..