Thursday, 16 June 2011

“Changing the way we think about shipping”

Maersk Lines- the world’s largest container carrier- has, in recent times, been at the forefront of examining new environmental initiatives for the future. However, it has gone a step beyond that, recently bringing out a manifesto for its container business in particular and for the broader maritime industry in general.

Maersk CEO Eivind Kolding says that this declaration of intent by the company has been precipitated by the “truest business axiom of all: that those who stop listening to the market because they think their methods and products are too established to fail … end up failing”. Concerned that shipping has not changed with time and that altering ingrained industry habits is as difficult as ‘turning around one of our vessels midstream in the Suez Canal,’  the manifest feels that the demands of a new generation of customers require a paradigm shift in the way the business is run; Schedule reliability, money-back guarantees, quick notifications of delays, intuitive self-service and ease of business are critical, Maersk feels, implying that a revolution in industry practice- akin to the one that was forced by the introduction of the freight container many years ago- is the need of the hour. “Containerisation re-invented global commercial trade. The time has come to make that kind of change again,” says Kolding, echoing his company’s manifesto that points out that discourse in shipping has barely changed for half a century.

Maersk highlights several key areas in its manifesto. It feels it is critical to rethink the maritime business as part of customers’ supply chain, for a start. The industry should look at greater web based, user friendly and real time solutions for its customers; the manifesto draws parallels with the launch of the low cost airline Ryanair in 2000 in this connection, an event that revolutionised the way airline industry operates today. Maersk asks, “Can we state that the shipping industry has gone online? Or are we missing some opportunities to interact with customers through more channels?”

Maersk draws from the experiences of the cell phone, car and airline markets, and lists two important lessons learnt there: One, that just because a business is established, it may only be a few years from being completely overtaken by new technology. Secondly, says Maersk, market and customer behaviour is forcing companies to never lose sight of what customers really want – including the needs they are not even aware of.

The manifesto points out that only half the containers reach customers on time at present. “Name a supplier to your business that only delivers half the time, but is still able to count on your loyalty as a customer,” it asks. Besides, there are other issues: “The shipping industry is faced with three fundamental challenges: our unreliability, our complexity and our environmental impact”.

Maersk reserves its strongest argument for the latter. “Why shouldn’t we hold ourselves to the highest environmental standards?” the manifesto asks, acknowledging that while shipping is ‘is the least polluting way to mass-move commercial goods around the planet’, it should be proactive in helping to set standards. This is because, in a future where the consumer will consider the carbon footprint of businesses to make decisions, a proactive approach by the industry will help customers will then be able to brand their businesses with the product’s energy efficiency. Shipping, being the cleanest way to move goods, will automatically benefit, and will not only ‘strengthen our own image, but also the image of our customers.’

All in all, the Maersk manifesto is a compelling document, and one we hope will force other companies to introspect, resulting in a greater widespread acceptance of sound business and environmental practices across our industry.

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