Market-share Doesn't Guarantee Profitability

Market-share Doesn't Guarantee Profitability

Letter to the Editor, Feb. 23, 2009

I read with interest Joe Bonney's Feb. 2 editorial, "Market share madness." I found during my career in the maritime industry that invariably the sales and marketing groups would always want to go for market share, regardless of the revenue required to offset operating expense.

This mindset has been prevalent in the past, is so in the present and will be in the future. In the early days of Sea-Land and under the direction of Malcom McLean, our sales and marketing force were given guidelines as to the minimum freight rates they could quote and offer. These guidelines were set down in their sales and marketing manuals. The guidelines were simple and straightforward. They gave the operating expense of pickup and delivery, stevedoring and vessel overhead for each of the routes served, as well as the margin of profit requited.

We did not work on market share. Rather, we offered fixed sailings, customer service, in-transit inventory and just-in-time delivery. We found that most customers preferred service and reliability.

There is no question that Sea-Land's growth in the 1960s and 1970s was due to that service and reliability.

Capt. Warren G. Leback
Skillman, N.J.