Executive Briefings

The Problem with Container-Shipping Industry? It Doesn't Price Like Wal-Mart Does.

The vice president of inbound transportation for Wal-Mart Stores said the container shipping industry should adopt his company's consistent low-price concept in order to reduce price and demand volatility.

Robert Kusiciel said liner carriers and shippers have been overly reliant on market pricing, leading to huge swings in rates that have little to do with the costs to carriers of actually providing transportation services.

He explained that the retailer uses consistent pricing near the low end of the pricing spectrum, while most retailers price their goods high then offer deep discounts through sales, rebates and other promotions. He said the container shipping industry functions in a somewhat analogous way, providing little long-term consistency.

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The vice president of inbound transportation for Wal-Mart Stores said the container shipping industry should adopt his company's consistent low-price concept in order to reduce price and demand volatility.

Robert Kusiciel said liner carriers and shippers have been overly reliant on market pricing, leading to huge swings in rates that have little to do with the costs to carriers of actually providing transportation services.

He explained that the retailer uses consistent pricing near the low end of the pricing spectrum, while most retailers price their goods high then offer deep discounts through sales, rebates and other promotions. He said the container shipping industry functions in a somewhat analogous way, providing little long-term consistency.

Read Full Article