Many industries are cyclical, but none are so cyclical as container shipping.
For decades, the container shipping Ferris wheel that is supply and demand has kept rotating. When demand spikes in certain trades, carriers rush to introduce capacity to soak up the profits. As supply starts to outweigh demand, the rates drop, as do the profits, and ships are redeployed or parked.
All the while, carriers are trying to prove how they are not like the other guys by showing how big — or small —they are, or how their schedule reliability stands out this month, or how many turns they do an hour. Unfortunately, these statistics constantly change, like a Ferris wheel inside a Ferris wheel.
In addition to these elusive statistics, some carriers are now focusing on the upsell, things like door deliveries, brokerage, SKU visibility, or even consolidation programs to keep the profits coming. The problem for shippers is the Ferris wheel of supply/demand keeps moving.
From one month to the next, shippers can’t tell what the carriers are selling in a particular week. One day you might get a sales call talking about this great opportunity for sweeper vessels, and next week you’re told that an entire service is being canceled next month.
As for the upselling of extra services, some carriers like to talk about things such as PO management, track/trace, origin consolidation, broker activities, and similar supply chain solutions. Unfortunately, most carrier sales personnel are not experienced in the full supply chain cycle — i.e., demand planning, inventory, obsolescence, etc. They’re selling solutions, but they want to turn it over to another silo in their operation once they get a bite.
For these upselling programs to make sense, the upsell has to be attached to the main component. Carriers today want to sell you inland delivery but not necessarily the ocean service. You can buy the leather seats, but without the car they won’t do you much good.
Ocean carriers need to get back to what makes them stand out among the crowd and do it consistently. Is it reliability, space, lead time, predictability, customer service, price, or a combination of these? Until carriers can figure this out, they should stay away from the upsell.