The ocean trade consultant says carriers need to better understand potential customers’ product mixes and consumer markets before chasing them with low rates in the current low-demand environment.
Carriers should look intently at the geographic footprint of the customers they chase, the ocean freight advisory group Seabury said Wednesday.
Speaking at the TPM Asia conference in Shenzhen Tuesday, Michel Looten, director of maritime for Seabury urged carriers to examine whether the customers they seek out have sourcing points and consumer markets that match the carrier’s network.
“Focus on the right potential clients based on their product mix and markets they serve,” Looten said. “Don’t just go out and offer low rates to everybody.”
As an example, Looten highlighted how carriers might handle selling to five different air conditioner manufacturers with operations in China. While three of the five companies primarily manufacture climate control products, those three have distinctly different destination markets for their products. One sells primarily within Asia, with hardly any North American sales.
Another sells heavily to emerging markets in the Middle East and South America while the third sells evenly among five global regions. The other two manufacturers serve diverse consumer markets but air conditioners only make up a minority of their total trade volumes.
Looten’s point was that carriers can’t approach those five shippers with the same rate and service proposition despite them all manufacturing the same product in the same region. The point is particularly relevant as carriers search for profit-bearing revenue and growth markets amid a global container trade environment that grew only 1.6 percent in the first half of 2015.
“Make sure you analyze your markets in some detail,” he said. “Then you can find opportunities even in declining markets.”
Seabury urges container lines to focus more intently on specific sectors
