Container Carriers Must Change Course to Restore Profitability
The Container-Shipping Industry Must Exercise Greater Discipline in Its Strategic, Commercial, and Operational Practices to Restore Profitability, a BCG Report Explains
(firmenpresse) - COPENHAGEN, DENMARK -- (Marketwire) -- 10/10/12 -- Container carriers can recover from the losses they suffered in recent price wars by adopting more disciplined business practices, according to a new report by The Boston Consulting Group (BCG). The report, titled "Charting a New Course: Restoring Profitability to Container Shipping," is being released today.
The report finds that the container-shipping industry's poor performance in 2011 and its continued struggles in 2012 are primarily the result of a self-inflicted supply-and-demand imbalance, which triggered intense competition and price wars. The report explains how the industry is harming its own economics by following misguided practices -- especially those affecting capacity and pricing decisions. The authors also discuss how other factors conspire to make profitability more elusive than in other industries and describe the challenging near-term outlook.
Fortunately, carriers have opportunities to address these challenges and improve their performance. "Carriers should not be willing to accept the volatile financial performance they have experienced in recent years," said Ulrik Sanders, a BCG senior partner and coauthor of the report. "Although it's true that carriers are exposed to market forces that make profitability hard to sustain, they can overcome these challenges by bringing the right mix of discipline and diligence to each aspect of the business."
The report discusses a wide variety of strategic, commercial, and operational initiatives that each carrier can undertake to chart a new course -- for itself and the industry as a whole -- and offers ten imperatives for sustaining profitability. Key themes are:
Defining an effective strategy aimed at achieving a competitive advantage and built on shoring up key infrastructure assets, establishing stronger alliances, and selectively pursuing M&A
Demonstrating the value of offerings (including commodity and premium services), setting prices according to market position and customer relationships, and monetizing all service offerings
Rigorously managing and variabilizing costs to enable critical improvements in operational efficiency
Enabling informed and data-driven decisions by establishing a robust IT infrastructure, applying business and market intelligence, developing and retaining the right talent, and creating clear metrics to track performance
As the foundation for these moves, carriers must shift their mindset to apply more disciplined practices and compete selectively to ensure a profitable business. "Carriers can no longer rely on a one-size-fits-all approach," said Dinesh Khanna, a BCG partner and coauthor of the report. "They must decide how and where to compete by analyzing profit pools and the cost to serve specific markets and customers." "Ultimately, carriers must stop making decisions primarily on the basis of capacity and utilization levels," added Lars Fæste, a BCG partner and coauthor of the report. "The industry must find ways to make money in periods of excess supply by exercising all options to achieve capacity discipline. These actions include not only slow steaming, idling vessels, and scrapping tonnage but also intelligently pricing services. Additionally, carriers must not hesitate to shut down a business that doesn't deliver economic results."
A copy of the report can be downloaded at .
To arrange an interview with one of the authors, please contact Eric Gregoire at +1 617 850 3783 or .
The Boston Consulting Group (BCG) is a global management consulting firm and the world's leading advisor on business strategy. We partner with clients from the private, public, and not-for-profit sectors in all regions to identify their highest-value opportunities, address their most critical challenges, and transform their enterprises. Our customized approach combines deep insight into the dynamics of companies and markets with close collaboration at all levels of the client organization. This ensures that our clients achieve sustainable competitive advantage, build more capable organizations, and secure lasting results. Founded in 1963, BCG is a private company with 77 offices in 42 countries. For more information, please visit bcg.com.
is a new website -- available on PC, mobile phone, and iPad -- that features the latest thinking from BCG experts as well as from CEOs, academics, and other leaders. It covers issues at the top of senior management's agenda. It also provides unprecedented access to BCG's extensive archive of thought leadership stretching back almost 50 years to the days of Bruce Henderson, the firm's founder and one of the architects of modern management consulting. All of our content -- including videos, podcasts, commentaries, and reports -- can be accessed via , mobile, , , , and .
Themen in dieser Pressemitteilung:
Unternehmensinformation / Kurzprofil:
Datum: 09.10.2012 - 22:01 Uhr
Sprache: Deutsch
News-ID 1158618
Anzahl Zeichen: 0
contact information:
Contact person:
Town:
COPENHAGEN, DENMARK
Phone:
Kategorie:
Accounting, Audit and Tax
Anmerkungen:
Diese Pressemitteilung wurde bisher 201 mal aufgerufen.
Die Pressemitteilung mit dem Titel:
"Container Carriers Must Change Course to Restore Profitability
"
steht unter der journalistisch-redaktionellen Verantwortung von
The Boston Consulting Group (Nachricht senden)
Beachten Sie bitte die weiteren Informationen zum Haftungsauschluß (gemäß TMG - TeleMedianGesetz) und dem Datenschutz (gemäß der DSGVO).
