Question

Topic: Strategy

How To Creating A Nvocc Business

Posted by Anonymous on 6/13/2005 at 5:00 AM ET 50 Points
My company is major in logistics/warehousing/land transportation player. We have 40+ warehouse across the country, 1000 container haulage trucks. We also have a huge loyal customer base. Currently 100% of the customers are going direct for sea freight from vessels operators or their agency. I was tasked to study the profitability of creating a NVOCC business since we already has direct customers. It would be a entirely separate entity, own accounting, staffing and P/L sheet.

I had worked in a Shipping Line before but I do not have very clear picture how the NVOCC business model works. And how can we compete with direct quotations received by shippers. Other than some of the advantage we have like one-stop business model that we could offer. In the end pricing is what matters most for shippers, but we are not prepared to off-set by give discounts from profits we made from haulage.

How do I position my company to stronger players already in the market and direct sales from shipping lines and their agencies?

Other than earnings from bulk discount I received from Shipping line? How can I integrate with my existing set-up without much alternation to job functions and staffing?
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RESPONSES

  • Posted by telemoxie on 6/13/2005 at 10:53 AM Accepted
    I do work related to the Maritime industry every day, and have no idea whatsoever what an "NVOCC business" is. Can you provide a bit more info?
  • Posted by Mushfique Manzoor on 6/13/2005 at 11:33 AM Accepted
    hi telemoxie

    NVOCC is Non Vessel Owner/Operator, Common Carrier

    cheers!!
  • Posted by telemoxie on 6/14/2005 at 9:25 PM Member
    If I were in your shoes, I would begin by identifying every similar company which is a public company in the US, and downloading then reading their financial statements, which will provide you with lots of info on their business model (as well as perceived risks, challenges, projections, cash flow info, profits...). Following that, my next step would be to go to each company's web site to attempt to determine their market positioning strategy. If after this you still need some advice or guidance, give me a ring.
  • Posted by telemoxie on 6/21/2005 at 8:34 AM Member
    p.s. Thanks, Mushfique.
  • Posted by Mushfique Manzoor on 6/25/2005 at 7:50 AM Member
    hi olivethree

    my 2 cents on your problem...

    1. talk to your exiting customers and try to get the rate they currently enjoy from shipping lines or agents and the number of containers each are shipping per month.

    2. then talk to the shipping lines and try to get a bargain rate for each destinations based on promise of giving certain number (say 100 containers of 40 ft) of containers per month and become an agent of shipping lines. you

    3. your selling point will be you are the agent of more than one shipping lines, you provide one-stop comprehensive logistics service.

    4. in order to compete on price, your selling points are bulk rates you get from shipping lines and you will create special package price including your warehousing and transportation and NVOCC. although you will maybe give small discounts from both your companies, to the customers they will see a great reduction in cost when they are availing all the service in one.

    5. when you are offering a comprehensive service package (including the NVOCC), you can give the customers in WAIVERs in some of the anciliary charges that other competitors charge (i am not aware of your country practices).

    hope this helps.

    cheers!!
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