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A Container Shipper Reverses Decline in Profits

BCG helps a container company make structural improvements to ensure that it can sustain the benefits of a transformation program into the future.

In the aftermath of the global economic downturn, an international container liner faced significant losses and increasingly complex operations. The company had consistently been among the least profitable liners in the industry and faced the consequences of running networks and operations that weren’t planned or executed well.

BCG helped the firm design a multistep approach for company-wide transformation. Important elements of the strategy included a plan for optimizing trade coverage. For example, the company reduced coverage on specific trades and redirect activities to main trades. The firm improved its go-to-market approach by redesigning the sales organization and realigning the mix of customer and cargo activities. The container company also found significant opportunities to reduce costs.

As a result of the transformation, the company has significantly increased its profitability compared to industry norms. By the second year of the project, earnings before interest and taxes surpassed the overall market average, a significant improvement from the 10% deficit the company had posted prior to the new program. The container liner also initiated structural improvements to ensure that it could sustain the benefits of the program into the future.

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