Shipping issues are impacting supply chains in every industry, increasing lead times, and causing companies to rethink their operations in order to get cargo to their customers. Companies have rushed to fill rising demands for imports, leaving ports and roads alike clogged with traffic worsened by labor shortages. In this environment, one business-to-business (B2B) industry, ocean shipping, is turning to airfreight options to ease its struggles.
With delivery wait times extended from weeks to months for many products, customers have sought out alternatives. In one industry, customers have found their own solution: restoring antique and vintage furniture. Rather than wait months for that new couch, many interior designers and homeowners are turning to thrift stores, yard sales, or their own attics.1 But it’s not just furniture that has consumers sifting through used goods. Everything from used cars to rare collectible purses are being sought out in place of the new and unused for reasons such as sustainability, lower prices, and fashion trends.2 If end-users are finding their own solutions, such as thrifting and restoration, demand decreases and all those in-transit goods are still stuck on their ships with no one interested in buying.
Because B2B markets have a direct supplier to manufacturer supply chain, demand for B2B products relies on the consumers’ demand. This demand, both derived and fluctuating, can be an issue for B2B marketers, especially when incorrect market predictions create an under- or over-supply of production. With COVID-19 outbreaks causing additional delays in manufacturing and shipping but huge surges in consumer demand, cargo ships, trucks, and trains are overwhelmed with moving goods.3
In some ways, business markets have similarities with consumer markets. An important distinction, however, is in the relationship between business and customer. This relationship is often a much more personal connection in B2B markets due to the often complex and costly nature of the products or services being traded with some deals also taking years to complete. Therefore, personal selling, technology, and customer service are essential to maintaining fast and easy communication with customers.
Ocean shipping lines are an example of a B2B company; simply put, they transport goods for a company who then sells those goods to consumers. To get cargo to its destinations, ocean shipping lines have begun purchasing their own cargo planes to decrease wait times and pressure on shipyards. For example, CMA CGM and A.P. Moller-Maersk have been expanding their air fleets since last year in order to meet current shipping demands and “expand beyond their boats into end-to-end logistics providers.” 4
This is both a short-term solution and long-term investment. Shipping cargo by air allows B2B marketers to maintain good relationships with their customers by making deliveries faster and simplifying the supply chain. Purchasing aircraft also differentiates their business from other ocean shipping lines and airfreight companies by offering both types of transport.
“Before the pandemic, much international airfreight was handled by airlines in the bellies of passenger jets. Unlike those companies, Maersk and its peers are looking to ship pallets loaded with various goods, often for a single or a handful of clients, rather than bundles of smaller packages.” 5
In the long-term, having this distinction will likely prove lucrative. Maritime transport alone plays a role in “90% of global trade and [is] responsible for moving 95% of goods that we use on a daily basis.” 6 Airfreight, on the other hand, “accounts for less than 1% of global trade by volume but 35% by value.” 7 Utilizing both forms of shipping allows these B2B companies to provide their customers with improved supply chain logistics: the option to use the same company but different types of transport for shipping cargo.
By differentiating their business through the long-term investment into airfreight, marketers for ocean shipping lines are improving their customer relationships and fulfilling contracts with business partners. At the same time, they are likely going to change the shipping business from predominantly ocean shipping routes to new routes by air, altogether avoiding the need for passenger flights to ship smaller-scale cargo.
Amazon has been attempting to avoid supply chain issues by purchasing its own air fleet, Prime Air, as well as additional trucks, shipping containers, and other forms of transportation.
For now, it seems supply chain issues will not be easing any time soon. Labor, shipping container, and ship shortages along with overflowing warehouses are in part contributing to the rising consumer prices. Unfortunately, these issues are unlikely to have quick, easy, or cost-effective solutions. According to one survey of over 3,000 chief executives, “fewer than half said they were taking longer-term action to alleviate supply chain challenges” and “more than three-fourths … were skeptical that their plans would prove effective.” 8
In the meantime, companies also face the issue of determining what happens to the extra cargo that finally makes it to land but no longer has a purpose because planes have already delivered the needed supply. In some cases, legal disputes have already broken out over who holds responsibility for goods in-transit or contracts unfilled due to shipping delays.9 This is all to say that monitoring consumer trends, remaining flexible and innovative, and having efficient supply chain operations in place are important to maintain strong customer relationships in business markets such as shipping.
Questions marketing managers would consider:
- What marketing strategies can be used to develop strong business-customer relationships in B2B markets?
- Why are efficient supply chains necessary for business markets to function?
- Have shipping delays impacted your life? Can you think of ways companies could improve supply chain logistics?
- Why do B2B marketers have to monitor consumer trends?
References
1 Slatalla, M. (4 February 2022). How Shipping Delays Turned Used Furniture into a Hot Commodity. The Wall Street Journal. https://www.wsj.com/articles/shipping-delays-used-furniture-kaiyo-chairish-11643926167?mod=Searchresults_pos3&page=1
2 Doniger, A. (28 November 2021). Shoppers are buying from resale retailers more than ever. Here’s why. CNBC LLC. https://www.cnbc.com/2021/11/28/shoppers-are-buying-from-resale-retailers-more-than-ever-heres-why.html
3 Ziobro, P., Berger, P., Paris, C., & Smith, J. (26 November 2021). On the Front Lines of the Supply-Chain Crisis. The Wall Street Journal. https://www.wsj.com/articles/on-the-front-lines-of-the-supply-chain-crisis-11637922602?mod=article_inline
4 Paris, C. (4 February 2022). Why the World’s Biggest Ocean Shipping Lines Are Buying Cargo Planes. The Wall Street Journal. https://www.wsj.com/articles/why-the-worlds-biggest-ocean-shipping-lines-are-buying-cargo-planes-11643979602?mod=Searchresults_pos2&page=1
5 Paris, C. (4 February 2022). Why the World’s Biggest Ocean Shipping Lines Are Buying Cargo Planes. The Wall Street Journal. https://www.wsj.com/articles/why-the-worlds-biggest-ocean-shipping-lines-are-buying-cargo-planes-11643979602?mod=Searchresults_pos2&page=1
6 Wilson, C. (12 April 2019). Why the shipping industry needs to lead the way in B2B marketing over the next decade. LinkedIn Corporation. https://www.linkedin.com/pulse/why-shipping-industry-needs-lead-way-b2b-marketing-over-chris-wilson/
7 Paris, C. (4 February 2022). Why the World’s Biggest Ocean Shipping Lines Are Buying Cargo Planes. The Wall Street Journal. https://www.wsj.com/articles/why-the-worlds-biggest-ocean-shipping-lines-are-buying-cargo-planes-11643979602?mod=Searchresults_pos2&page=1
8 Goodman, P. S. (1 February 2022). A Normal Supply Chain? It’s ‘Unlikely’ in 2022. The New York Times. https://www.nytimes.com/2022/02/01/business/supply-chain-disruption.html
9 Constable, T. (20 January 2022). Supply chain disruption: are contractual disputes just an “ever given”? Dentons. https://www.dentons.com/en/insights/articles/2022/january/20/supply-chain-disruption
Marketing Management 