In her 2008 book, “The Celebrity Experience: Insider Secrets to Delivering Red Carpet Customer Service,” author and motivational speaker Donna Cutting delivers some simple advice to companies of all types when dealing with those who buy their services: “Give them their chicken soup.”
By “chicken soup,” Cutting is referring to the things that bring customers comfort and satisfaction.
Transportation providers, particularly ocean carriers, could learn a thing or two from Cutting’s book. It is, after all, service that has been perhaps the biggest complaint among carrier customers — beneficial cargo owners — in recent years, and is perhaps their single biggest concern with the pending launch of new or expanded mega-alliances.
With ocean shipping increasingly viewed as a commodity, shippers and carriers recognize that the difference between one carrier and another no longer will be measured by pricing that has little upside potential in this age of supply-demand inequity but instead by the service they provide.
Right now, that service is headed in the wrong direction. Reliability as measured by on-time arrivals sank to 77.6 percent in the fourth quarter of 2013, according to SeaIntel — the worst performance since the research analyst began such tracking in 2011.
Drewry, another consulting and research firm that tracks reliability, expects such service to get worse in the months ahead as mega-alliances such as the new P3 and expanded G6 adjust their networks.
Even carrier executives recognize the problem, one that’s familiar to anyone trying to contact all types of service providers, from Internet providers to health insurance representatives: “We’ve gotten so dependent on systems that sometimes no matter what business you deal with, you call up and talk to a computer and get a list of different options,” Howard Finkel, executive vice president of Cosco Container Lines (part of the soon-to-expand CKYHE Alliance among Cosco, “K” Line, Yang Ming, Hanjin and Evergreen), told the JOC’s TPM Conference in March. “It’s very difficult to get to a person.”
Customer service, he said, will be what separates those carriers who treat freight as a pure commodity, and those who see it as something more. “Who are the problem solvers? That’s the key — you have problem solvers when you have an issue, and someone solves it quickly,” Finkel said. “Is there a personal touch?”
Sure, you in the peanut gallery say, but you get what you pay for. Fair enough. Freight rates are flagging and are little changed from what they were two decades ago. Carriers are losing billions of dollars a year, and some are staying afloat through the only means possible: by controlling costs.
We’ve heard time and again that if customers are willing to pay, then vendors are willing to provide. Problem is, the conventional wisdom has been that equally cost-conscious customers aren’t willing to pay.
But if Peter Leach’s story tells us anything, it’s that shippers — some of them, anyway — are willing to pay for better customer service. “For a carrier that provides better service, I would be willing to pay $20 to $25 per container,” the logistics chief of a smaller home furnishings company told Peter Leach. If a self-described smaller shipper is willing to pay that rate, how far is a major BCO willing to go?
More importantly, how far is a carrier, even one in a mega-alliance, willing to go for customers who are willing to pay the freight — and more? It’s time for carriers, all carriers, to ask their customers: What is your chicken soup?