Hi, Nemo here again!
Do you remember what I wrote about here the last time?
No, ok, I wrote about hiring consultants for finding new customers with freight between regular harbors, and that was based on my idea of how to go about reaching a lot higher utilization of our capacity, which today is less than 50%.
With some luck, we might reach 100% and that would mean, that we could attract new clients with a super offer, a time table based on regular traffic. Not bad! Not bad at all!
Now I have two things to do. First trying to convince my CEO about this idea’s advantages and then finding the right consultants. I’ll start by talking with my CEO.
– Hi boss, Nemo here, do you have a few minutes?
– Sure Nemo.
– Sir, we are sailing around with an empty ship more than half the time. If we could find new regular customers, we’d be able to more than double our turn-over as well as our profit, which in its turn would enable us to reduce our prices heavily. What we need to do is to see if there are more potential freight clients around those ports we often visit. In order to that we need a consultancy to investigate the industries’ transports from there.
– Nemo, would you please repeat it all again!
Which I did. Then the line went silent.
– Sir, are you still there?
– Yes, Nemo I am still here considering what you just said. But listen to this first. I do really appreciate your ambition and your straightforwardness. There is however one factor you’ve forgotten to calculate.
– What’s that sir?
– The yield, my friend, the yield!
– I do not know what that is, sir
– Let me put it this way. If you had brought that factor into your calculation you would have seen, that our average price per kilo is more than double compared with the regular ship line’s price per kilo and thereby we are better off continuing our business as usual in spite of a low utilization percentage. You get my point, Nemo?
– Most certainly sir! How could I miss that?
– Never mind, Nemo your ambition is an asset to our company.
PS: What the CEO just taught Nemo was; do never mistake volume for profit! Instead think like all air lines – they have sharp eyes on their yields and cabin factors all the time, which is exactly what this is all about – a profitable utilization of available capacity. And that’s the challenge!
And a tough one too. For all businesses!
Dedicated his full life to business in Sweden as well as in the US, Germany and Switzerland. Also a number assignments all over the world.
Experiences; salesman, sales leader, marketing director, vice president and CEO.