How to recapture lost customers at avergreen shipping agency (vietnam)

UNIVERSITY OF ECONOMICS HO CHI MINH CITY
International School of Business
------------------------------

NGUYEN THI PHUONG TRINH
HOW TO RECAPTURE LOST CUSTOMERS AT EVERGREEN
SHIPPING AGENCY (VIETNAM)
ID: 22130086

MASTER OF BUSINESS ADMINISTRATION
SUPERVISOR: PROF. NGUYEN THI MAI TRANG

Ho Chi Minh City – Year 2016.

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EXECUTIVE SUMMARY
Suppose that the shipping industry is a potential & challenge field in Viet
Nam which we need to explore and develop the service quality more strongly &
fruitfully. The author of this paper who has ever spent the working time at the
Evergreen shipping Agency (Viet Nam) (EGV); has a bit of experience in this
shipping field and decides to choose the subject of thesis relating to this field with
hoping that the thesis can help the company to realize the organization problem and
find the suitable solution to improve service quality better to gain the top position in
the shipping industry. The author has a chance to contact with many departments in
EGV and decides to focus mainly on the business department because the author
was learned that business department is the most important department to help to
bring to the profit for the wholly company. Recently, the author is informed that
business department needs to be improved because its performance is too bad.
During researching, the author finds that business department is facing with the

main problem: Lost accounts leading to cargo lifting decreased too much during
the first quarter of 2016. First, the author discovers the causes and effects of the
problem. There are many causes leading to lost account of EGV and the author
proceeds to survey, evaluate and gives the conclusion of the most important cause
which affects strongly to EGV’s lifting falling. The main cause is regarding to rate
issue which salesperson in charge can’t match suppliers’ request. Many accounts
were lost or stopped using EGV’s service to move to other competitors who can
meet their expectation. However, the main cause which is stated here is still unclear that needs to investigate deeper to find out the real problem and the author
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continues to do the second survey in next step and find that the real cause is the
failure of customer retention. With the increase in the pressure of external threats in
an unpredictable and uncertain market circumstance, liner shipping companies have
to make clear strategies to survive. The result of a study intends that EGV still have
many occasions to adjust and improve in the strategic decision-making on business
problem in maintenance and improvement of customer retention. Once the business
problem and its most important causes have been identified and validated, a solution
can be designed. There are two solutions given to discuss as below:
Solution 1: Freight adjustment to meet customer’s expectation (direct
solution)
Solution 2: Developing a system for measuring the performance of a sales
department (indirect solution through human resource aspect)
The author evaluates and makes a comparison to choose the best suitable
solution. Suppose that once internal support system is improved effectively, EGV
has many chances to attract customers towards the service more and more. So, the
second solution is chosen the best one for project-oriented evaluation. In order to
help the readers to understand more details and take this paper as the sample to
make a reference for the similar organization situation in the shipping industry.
Through this paper, the author will present, analyze, evaluate the symptomatic

phenomena of a specific problem of the project throughout the whole process and
give valuable comments for the organization.

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HOW TO RECAPTURE LOST CUSTOMERS AT
EVERGREEN SHIPPING AGENCY (VIETNAM)

ABBREVIATION & NOTES
ACKNOWLEGEMENT
I/ COMPANY INTRODUCTION ............................................................................................. 7
II/ PROBLEM IDENTIFICATION .......................................................................................... 9
III/ EXPLORATION OF POTENTIAL SOLUTIONS FOR THE PROBLEM ................. 35
IV/ IDENTIFICATION / ACTION PLAN ............................................................................. 46
V/ CONCLUSION ..................................................................................................................... 50
VI/ SUPPORTING INFORMATION ..................................................................................... 51
REFERENCES .......................................................................................................................... 55
APPENDIX ................................................................................................................................ 60
RESEARCH TRANSCRIPTS
CUSTOMER SATISFACTION SURVEY TEMPLATE

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ABBREVIATION & NOTES

2M: container shipping industry alliance between Maersk (MSK) and MSC
BCC: Business Controlling Center
B/L: Bill of lading

CEM: prefers to the main service to Europe
EGL: Evergreen line (group)
EGV: Evergreen Viet Nam
FOB & CNF: payment term under collect and prepaid respectively
Global NOVCCs and Tender A/C(s): a/c(s) belongs to these groups considered as
VIP account.
GPS: Global Position System to calculate the user's exact location and determine
the user's position.
G6: the six largest European Union members (APL, HAPAG-LLOYD, HM, MOL,
NYK, OOCL)
KPI: Key Performance Indicators
NE2: prefers to the new direct service to Europe which hasn’t still exploited by
EGV
NLRDM/DEHBG/GBFLX/FRLHV/GRPIR: main ports of WB service.

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NVOCC: stands for Non-Vessel Owning Common Carrier. NVOCC operation
comprises of sales, stuffing and transport of the containers to gateway ports.
O3: Ocean three alliances of three members USAC, CSCL and CMA
POL: port of loading
SUP-PSN: Humane Resource department
WBD: West Bound department (for long haul section consist of two trades: Europe
(EUR) and Mediterranean (MED)

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ACKNOWLEGEMENT

I thank the anonymous reviewer for the valuable comments during doing the
researching. Further, I am indebted to my supervisor, Prof. Nguyen Thi Mai Trang
for productive comments that led to improvements in this paper. Finally, I sincerely
thank the support from my colleagues and managers at Evergreen Viet Nam to help
me so much in the data collection and contribute the valuable knowledge in the
shipping industry. If there are not the great supports from you, the author can’t
finish this paper effectively and usefully.

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I/ COMPANY INTRODUCTION
Evergreen Line is ranked in Top 10 of 100 carriers having the best service in
the shipping industry in the world during over the past 40 years.

As one of

Taiwan’s most recognized global brands, Evergreen Line will maintain all of the
services currently operated and develop new trades to meet worldwide customer
demands. Evergreen Line serves over 240 locations around the world in Asia,
America, Europe, the Middle East, Australia and Africa. Evergreen is well
respected in the shipping industry with a reputation for providing customer-focused
solutions, a quality-through-excellence approach and continual innovation. It is also
an industry leader in the use of information technology and e-commerce to manage
the entire cargo process. Evergreen Shipping Agency (Viet Nam) was established in
2002 as the agent for Evergreen Line in Viet Nam. Currently, Evergreen Viet Nam
has Head Office in Ho Chi Minh City, 2 sub- agents (Da Nang, Quy Nhon), and 2
branch offices in Ha Noi and Hai Phong with totally over 200 employees. Each
year, EGV celebrates 2 times to review and evaluate the performance of ports of

loading POL(s) in area. According to EGV lifting statistics of 2012-2014, VNHCM
office is main one holding largely lifting with 75% per total lifting of EGV. So, this
study will concentrate on VNHCM office to review and evaluate service quality at
the beginning 6 months of 2015 when we were learned that its performance is on
alert.
Faced with more and more competitive market in shipping & logistics field,
building and maintaining a good relationship with customers is essential to longterm business survival. Known that business department of the company is the most
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important section to distribute on increasing total revenue yearly. In business
department, we are divided into 3 separated departments: BIZ-IAS (short haul
section), BIZ-LHS (long haul section) & BIZ-IMP (import section). (Figure 1)
EVERGREEN VIETNAM‘S SALES ORGANIZATION CHART

PRESIDENT

SALES
REPRESENTATIVE

HUMAN
RESOURCE

DJVP
BUSINESS

IAS Manager

Salesman

LHS Manager

IMP Manager

Salesman

Salesman

FIGURE 1: Evergreen VIETNAM’s Sales Organization Chart

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II/ PROBLEM INDENTIFICATION
To check the validity of the problem statement, the factual information has to
be collected.

The secondary data collection is the step in the process. The

empirical analysis of the business problem must be given. Through monthly/weekly
management meetings, West Bound group (WBD) belongs to BIZ-LHS section is
targeted and reported about the bad situation during the beginning 6 months of 2015
when the lifting always goes down and no signal to increase back. Prior to this
period, from 2012 to 2014, WBD often gained good performance (see table1);
however, the data in Table 2 conveyed the impression that total transportation
expenditures have exhibited a declining trend since the beginning period of 2015,
decreasing 25% lifting compared with the same time in 2012, down 27% compared
with 2013 and kept going down 16% compared with 2014. With hoping that WB
group will maintain the top position in shipping industry as before ( see Table 3)
and overcome the difficult situations to gain the better result, an attempt to search

for potential antecedents that have high power to explain customer’s satisfaction
and loyalty towards services.

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Table 1: WBD lifting performance 2012-2014
2012

2013

2014

WDB

TARGET

ACTUAL

%

TARGET

ACTUAL

%

TARGET

ACTUAL

%

EUR

5,000

5,000

100%

5,500

5,300

96%

6,000

5,500

92%

MED

2,400

2,470

103%

2,600

2,650

102%

3,000

2,700

90%

TOTAL

7,400

7,470

101%

8,100

7,950

98%

9,000

8,200

91%

(Source: 2012-2014 OLAP report in EGV business department)

Table 2: WBD lifting performance of 6 months period at beginning of 2012-2015

JAN TO JUNE 2012

JAN TO JUNE 2013

JAN TO JUNE 2014

JAN TO JUNE 2015

WDB
TARGET

ACTUAL

%

TARGET

ACTUAL

%

TARGET

ACTUAL

%

TARGET

ACTUAL

%

EUR

2,550

2,500

98%

2,550

2,550

100%

2,700

2,600

96%

2,700

2,050

76%

MED

1,200

1,220

102%

1,200

1,250

104%

1,800

1,450

81%

1,800

1,300

72%

TOTAL

3,750

3,720

99%

3,750

3,800

101%

4,500

4,050

90%

4,500

3,350

74%

(Source: 2012-1015 OLAP report in EGV business department)
*Target and Actual are calculated per TEU

*EUR & MED: Export cargo to North European & Mediterranean area

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120%

99%

101%

100%

90%
74%

80%

EUR

60%

MED

40%

TOTAL

20%
0%

2012

2013

2014

2015

Figure 2: Chart of WBD lifting
Table 3: Top Carriers for WB_2014 versus 100 carriers in the world
WB
MSK

23.0%

MSC

18.5%

CMA

13.0%

HPL

10.5%

EGV (Evergreen)

4.5%

OTHERS

30.5%

(Source: Carriers data)

►CAUSE AND EFFECT
The first qualitative research
In Evergreen Viet Nam, West Bound group is defined as a controlling &
managing group of export shipments to European ports including North
Europe and Mediterranean. West Bound team is controlled by 1 salesperson
outside and 1 salesperson inside in BIZ-LHS section and other related departments
such as Customer service (CSD-TFC): 1 staff and Document department (CSD-

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EP2): 1 staff. As a researcher, the writer of this study has a chance to collect
secondary data (see table 1 &2) and have an interview with 10 customers and
persons in charge (P.I.C) in this department including 2 assistant managers (AM):
Ms. Tracy and Ms. Olivia; 1 Deputy Manager (DM): Ms. Judie, and 1 Deputy
Junior Vice President (DJVP): Mr. Elton to find out the diagnosis of the problem.
1/The main question was given to interview 10 customers and the feedback was as
below:
-

The researcher: What reasons do you give for choosing the most
preferred shipping line?

Table 4: Responses of 10 customers
Company name

Interviewee

Position

Feedback/Comments

GOTO
LOGISTICS
VIETNAM CO.,
LTD
THL
LOGISTICS
CO., LTD
VOLTRANS
LOGISTICS
CO.,LTD

Mr. An

Sales
Manager

Qualified rate is the most
important to our business.

Mr. Vinh

Salesman

Ms. Nguyet

Sales
Manager

FM GLOBAL
LOGISTICS
CO., LTD
SDV VIETNAM
Co., Ltd

Ms. Oanh

Salesman

Mr. Tri

Sales
Manager

Our customer doesn’t accept
your offered rate due to it is far
from their expectation.
We are very concerning to
transportation time and qualified
equipment. Your service is not
good due to long transit time and
sometimes, lacking of qualified

equipment.
Suitable freight rate is always
the best option so that we choose
carrier supplier.
Freight and transit time is both
important

MKP
SHIPPING CO.,
LTD
COMPASS
LOGISTICS &
TRADING CO.,
LTD

Ms. Jessica

Sales
Manager

Mr. Kevin

Sales
Manager

Our operation complains
document releasing procedure
slowly and we can’t accept this.
Both freight rate and transit are
important to choose carrier

suppliers.

Main
reason
Rate issue

Rate issue

Service
quality

Rate issue

Rate issue +
service
quality
Document
procedure
Rate issue +
service
quality

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SCHENKER
LOGISTICS
CO., LTD
DMG
LOGISTICST

CO., LTD
DAMCO CO.,
LTD

Ms. Loan

Pricing
Manager

Mr. Hai

Salesman

Ms. Yuna

Sales
Manager

Our customer don’t accept your
offered rate due to it is far from
their expectation
Your offered rate is not satisfied,
it is far from our expectation.

Rate issue

We are disappointed with your
service. Document is released
too slowly. We don’t accept this
issue.

Document
procedure

Rate issue

2/The main question was given to interview 02 sales in charge and 02 head persons
of EGV-WBD and the feedback was as below:
-

The researcher: What factors do you think to affect to your lifting
falling?

Table 5: Responses of 04 employees at EGV-WBD
Interviewee

Position

Feedback/comment

Main issue

Ms. Tracy

Assistant Manager

We lost account due to Lost account
freight issue and long
t/s time.

Ms. Olivia

Assistant Manager

Affected by devaluation Lost account
of EUR vs USD
currency; besides that
our customers complain
that our offered rate is
higher
than
our
competitorslost
account

Ms. Judie

Deputy Manager

Rate is high, t/s time is Lost account
not good vs our
competitors
lost
account Almost sales
in charge can’t gain the
target monthly

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Mr. Elton

DJVP

We exploit the bigger Sales
performance
container
ships
to weakness
enlarge capacity to load
more cargo; however,
the current market rate
is too competitive while
we can’t satisfy with
the
rate
as
per
customer’s
requestpercentage
sales is weak monthly

In order to make a selection, the above problem mess needs to be
represented. Therefore, the information gained during the intake and orientation has
to be structured and conveniently presented. An effective format for this is a causeand-effect tree, in which the more symptomatic phenomena are positioned on the
right side of the diagram and the causes on the left side. Its main function helps to
select a problem from the problem mess that will be considered as business problem
in the phases of the problem solving cycle.

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Exploiting bigger
container Ships

Enlarge capacity
to load cargo

High cost

Rate issue

Low selling price

Lost account

Marketing
competences
weakness
Lifting falling /
small profit
margins

Service quality
badly with longer
transit time
Quality unstable

Document
releasing

procedure slowly

Leading role
potentially
threatened

Euro expensive
compared to US
dollar

Figure3: Cause and Effect map of lifting falling

Selecting a business problem at the extreme right-hand side of the cause-andeffect tree normally increases the relevance of the study, but decreases its
feasibility. As services provided by the carriers in the market are rather similar, for
customers, the switching cost is not high which has intensified the competition in
the market. The carriers have to wage a price war to retain its customers and to
maintain its market share. According to Alphaliner (2005), Liner shipping
companies have a high upfront investment in fleets, technical equipment and
intangible assets. In recent years, with market demand and an improved technology,
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bigger ships have become main stream in market. Hence, the resale value of old and
small ships has dropped tremendously. Therefore, the products liner shipping
companies provide is little lower the degree of differentiation and high barriers to
exit because of high sunk costs, which leads to fierce price competition, especially
when market is stagnant. Because of high upfront investment, fierce competition
and high bunker price in recent time, lowering cost of operations is becoming very
important for liner shipping companies. Just as suppliers wish to maximize profits,
buyers wish to minimize the price they pay which lead to the decrease of profit

margin in major markets (see figure 3). According to this stream, EGV has also
enlarged capacity to load more cargo for WB trade by exploiting the bigger vessels,
unfortunately the market is stagnant due to devaluation of EURO versus USD
currency leading to low import demand of buyers in European area in this period
(Anaraki1, 2013). According to salesperson in charge of this trade, it seems that
EGV-BIZ/WBD can’t match with the market rate. Besides that, its service quality is
not evaluated well because of un-stability of sailing schedule leading to long transit
time which can’t satisfy customer’s expectation against their competitors. All these
precedents can make customer retention threatened and WBD can face with losing
their customers. In example presented in Figure 3, as the consequences, the
performance that was ultimately at stake was the profit margin of the service.
However, if this is chosen as the problem, a very broad range of causes has to be
considered, relating to capacity, cost policy, market competences, documentary
procedure and transit time. Furthermore, the actual diagnosis will probably uncover
many causes that are not yet represented in the tree. So, before the problem of

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WBD is defined, we will investigate and validate the above causes and then
selecting the actual diagnosis of the problem. The purpose of the research is to
empirically investigate the organization problems and select the type of the problem
which causing the negative impact on lifting falling in WBD. Once the business
problem and its most important causes have been identified and validated, a solution
can be designed.
►VALIDATION OF CAUSES
Collecting primary data
Table 2 presented that percentage of sales (below 80%) didn’t meet an
aspiration level during the beginning 6 months of 2015. Ms. Judie, deputy manager
of EGV-WBD, said that almost Salespersons in charge can’t gain the target in the

past 6 months. While Ms. Olivia, salesperson in charge of WBD, shared that she
met many difficulties in attracting company’s customer (even that customers used to
support for EGV as a regular account) towards the WB service because she
received much customer’s feedback about long transit time of the service and high
rate while rate items can fall down at the bottom level in the market, she said. But,
EGV-WBD can’t follow as the market rate level. Besides that, through many sales
reports in weekly meeting of WBD, they are also presented that due to devaluation
of EURO versus USD currency leading to low import demand of buyers due to
higher cost. Export turnover in Q1 in 2015 is -10.7%. Suspend Export shipment
(Anaraki1, 2013). However, according to Mr. Elton, a DJVP of BIZ-LHS,
concluded that the devaluation of EUR is a general statement in the market and
EGV can’t do anything to change this event. It isn’t a real reason to cause this
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falling in EGV, it is just an additional factor to make an affect to lifting falling. In
order to promote lifting and find the solution to improve the service, he suggested to
review global NOVCC and Tender accounts (A/Cs) list, and also requested to send
evaluation memory paper to all potential customers to appreciate consumer’s
satisfaction and loyalty toward services and find which most appropriate factor
should be targeted and oriented towards relevant problems/causes and possible
strategic consequences in organization. By this way, the researcher used this report
resume of customer contribution as primary data to evaluate and identify the
supporting ratio of existing customers towards EGV-WBD in the market share. The
outcome is below:
Table 6: Summary of Global NOVCCs and Tender A/C(s) Review
2013

2014

6 MONTHS 2015

VS MARKET

(TEU)

(TEU)

(TEU)

(%)

SDV

350

106

85

20

NIPPON EXPRESS

72

64

25

10

YUSEN

104

304

88

7

DAMCO

180

519

130

4

SCHENKER

741

335

174

4

PANALPINA

183

101

75

3.5

DSV AIR & SEA

67

52

24

3

GEODIS

11

7

28

1

K&N

42

61

3

0

DHL

58

59

17

0

AC NAME

(Source: EGV-LHS/WB lifting statistics of customer contribution)

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Table 6 shows that the lifting of Top accounts is gradually falling down in

this period. For example, K & N account booked only 3TEU during 6 months of
2015 that was falling so much compared with the previous 2013 & 2014 and it had
total lifting 0% per the market share. The case of DHL also was the same situation.
Others were decreased so much. Yang et al, 2013, the empirical results showed that
the five best feasible solutions providing service value that meet customer
requirements consist of “advantageous port logistics operating costs; “international
port policy; “port logistics operation efficiency; “high-quality logistics facilities;
and “professional logistics skills”. Evaluation on lifting statistics of customer
contribution, collection of customers’ feedback of above top accounts and combined
with 10 customer’s interview result (table 4, page12), the researcher found that the
problem of lost accounts may come from direct 4 consequences for customer
service quality:

transit time, freight rate, document handling, equipment

demand and quality. These antecedents are represented and analyzed clearly to
evaluate customers’ attitude about the firm service to make long-term decision in
using EGV-WBD service.
The second qualitative research
Again, to check the validity of the problem statement, factual information
has to be collected. Sometimes it is straightforward to validate the problem. The
author of this research focused on the above problems that WBD failed to meet
service level agreement (SLAs) causing to lost account. The researcher continued to
do an in depth-interview with questionnaires table to collect more information and
to ensure that the real problem executed correctly (see in appendix II.) Basing on
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the result of a survey of satisfaction evaluation towards EGV/WBD service with
220 customers (who use directly this service including: 55 direct shippers

(exporters)/suppliers and 165 forwarders– NVOCC) and we have the below
outcome:
Table 7: The significance of different factors in making decision in using the WBDEGV service
Satisfaction evaluation
Significance factors

Satisfied

Dissatisfied

To be considered

Freight rate

30%

65%

5%

Transit time/delivery time

50%

38%

12%

Document Handling

85%

12%

3%

Equipment availability and quality

90%

8%

2%

(Source: The author’s statistic outcome of customer satisfaction survey template)

According to the above results (Table 7), analysis of these findings by the
respondent’s role in transport choice decisions discovered minimal difference
between those actively involved and those who are less involved in progress. They
presented the results of an empirical study involving a single decision evaluated by
multiple participants (larger and smaller shippers, international freight forwarders)
in global trade. Evaluation for each item is analyzed and evaluated in detail as
below:

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1. Freight rate
The higher is the ratio of “dissatisfied”, proving that the more strongly the
transport choice decision is affected by that factor. Respondents indicated that

competitive port charges is the most important factor in service selection with 65%
in carrier selection concerning to the suitable freight rate and throughput
determination from the perspective of shippers.
In order to exemplify for the above mentioned issue, we have a personal
interview with Mr.Tri, a sale Manager of SDV logistics Co. and Ms. Loan, a
Pricing Manager of Schenker logistics Co., which were two of top accounts
represented in Table 4, less supported EGV in recent time and recommended that
although they were the regular accounts supporting EGV for the past many years
and preferred to use EGV service; however, in six months of the beginning of 2015,
more than their 2/3 of direct customers switched to MSC or OOCL instead due to
more competitive rate and only under 1/3 of direct customers kept to use EGV
service for the previous long-term relationship. In additional, some of the accounts
warned that EGV should have a review to make a change in next time if EGV
wouldn’t like to lose more customers. Another case, the interviewer contacted with
Mr. Hai, a salesperson presented for DMG LOGISTICS CO., LTD –a new account
under CIF term having export cargo to North Europe ports, to find the respond
from his company towards WBD service. He said that his company agreed to book
with EGV for the first time in March as a potential business with hoping to receive
a good support in long-term; however, they just began to switch their next orders to
MSC due to freight rate was more competitive and more attractive in such way. Or,
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GOTO LOGISTICS VIETNAM CO., LTD with volume 20TUE per month, total
volume

of

2014

was

over

200TEU.

Their

normal

routing

4p(s)

is

VNHCM/VNHPP/MYPTP/DEHBG. At the beginning of 2015, their volume was
decreased gradually due to rate issue. In April, they asked the offered rate
$450/2SD with valid April 30 instead of $700 valid in Mar as the prior notice. Sales
in charge applied to have approval for this deal, but WBD only can offer rate $550
at least. GOTO has switched their orders to MSC which can meet their requested
rate at this time. It shows that if the complaint is not dealt properly, the client may
resolve this dissonant state by lowering his view of the firm and deciding that the
firm’s capabilities are not good (Bolton, R.N. et al, (2000). The end result is to
discontinue business with the firm and switch to a new service provider.
Clearly, the consequences of these actions are not good for the service provider
as they lose business. According to sales section’s report, Mr. Elton also affirmed
that rate issue is the most important factor in service provider selection. He
mentioned on whether EGV can drop prices to match with the market price or not
when WBD’s offered rate is always higher than market rate from $50-$100/TEU.

According to Alphaliner (2015), a title of carrier activities newsletter, mentioned
that declining freight rate trend has been exacerbated by weak cargo demand
growth, especially in the European markets as carriers failed in their repeated
monthly general rate increase (GRI) attempts on the Asia-Europe route.
Although target prices are crucial, findings of the research (Table 7, p20)
indicated that there are 5% for some special cases. It means that clients can accept
to pay higher freight cost if EGV-WBD can arrange their shipment on the faster
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service to meet the delivery time. For example, a case of AOM LOGISTICS CO.,
LTD. agreed to book with the offered rate $650 valid in June with big stable volume
20TEU per voyage together with the requested schedule of 25days to NLRDM
(Rotterdam) to meet the delivery time for fashion exhibition cargo. In order to meet
the special case, EGV-WDB agreed to set up the special routing on NE2 service
instead of on CEM (the normal routing) as a new routing to arrange this special
order; certainly, the offered rate is higher than usual and negotiated successfully
already. However, such cases are not regular because customers need have the fixed
schedule plan and big volume (usually volume is requested above 20 TEU and
more) and guarantee the ex-loading done without failure to avoid the extra
cost/penalty incurred & charged by carrier. Limitation isn’t preferred because this
is the period of the power of buyers. Competition exists all the day. They can
choose another carrier which doesn’t have to apply this rule, but still having a good
rate and better transit time to meet their demand. Thus, basing on the above analysis
through data collection and interviews, we find that freight issue is a crucial factor
which affected strongly in carrier selection. EGV-WBD can maintain the long-term
relationship with their customer throughput determination from the perspective of
shippers regarding to this issue.

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2. Transit time
Another factor relating to selection the carrier service suppliers, it is the
transportation time. Relating to the service quality, containerization has also
facilitated ‘just in time’ (JIT) production through its improved schedule reliability,
low costs, high security and faster transportation time (Mary C.H.et al, 2000).
Container shipping lines have developed or at least aimed to develop liner services
networks characterized by low operating costs, high frequencies, fast transit times,
and both tight and reliable voyage schedules (Notteboom, 2006).With a growing
complexity in global transport networks, managing the factor time in the design and
operation of liner services is not an easy task. Time is money. Lost minutes result in
lost dollars for shipping lines and their clients. In the competitive market place
faced by shipping lines every dollar counts (Notteboom, 2006).
From the beginning of 2015, EGV-WBD had some changes in port rotation
leading to longer transit time. Looking at Table 8 below, we find that transit time of
EGV-WBD is not good compared with other competitors and this is also the second
crucial important issue which EGV-WBD are facing now beside of freight rate
issue.

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