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Freight expectations: managing tomorrow’s reputational risks today

06Jul Posted by Sermelo News

Scott Walker and Tom Clive partnered to develop a reputational insights piece for Port Technology International, a publication with a readership of over 20,000 senior executives at the world’s largest port authorities and terminal operators.

The piece looked at how shipping companies can act today, to combat the reputational challenges that they will face tomorrow.

React to survive: shipping companies must embrace the era of hyper transparency

In business today, corporate reputations are built on perceptions, which eventually match reality. Perceptions are sometimes ahead of reality;, at other times they lag behind. But, , regardless of the reality within which they operate, they can make or break a business,.

Within the B2B space, many organisations have fallen victim to the negative perceptions of the overall industry within which they operate. These ‘negative perceptions’ can build up over time and arise from different factors, such as a badly-handled crisis or scandal that lives long in the memory of the public.

Yet a poor reputation can also be developed through lack of action. An organisation or industry that doesn’t proactively communicate and adopts a closed or defensive standpoint with stakeholders can also suffer from the consequences of having a negative image. In today’s world, being reactive in your corporate communications is no longer enough, and I believe that the shipping industry is in danger of falling into the perception vs reality trap.

The perceptions

It’s fair to say that the shipping industry has struggled for many years to build trust with the general public – high CO2 emissions, reports of corruption, and financial greed are issues that immediately spring to mind.

A very quick Google search appeared to back this up. In under 10 seconds, I was able to find articles in the media (BBC, The Guardian and Financial Times to name a few outlets) focusing on the need for environmental reform within the shipping sector. Top of the page was The Rena oil spill, off the coast of New Zealand back in 2011, where 350 tonnes of oil were released into the ocean from a sinking cargo ship. Even the passing of Steve Jobs on exactly the same day couldn’t lessen the impact this spill had on damaging public trust.

Other issues my search revealed related to employee accidents at the port and at sea, and the grim economic outlook for shipping as a whole.

The reality

The reality of the industry is quite different. Like any heavy industry, it has its own issues and challenges that shouldn’t be overlooked, but it also has some fantastic initiatives that are much less visible.

For instance, ‘green ports’ have become almost a pre-condition for future development. Instead of threatening the wellbeing of frogs, birds or rare species of grass, port directors in OECD countries have begun building special islands and nature reserves for wildlife close to port areas. Some of these areas are considered the most valuable nature areas in the world, where true synergies between nature and ports are being created. Two of the world’s largest ‘green ports’ are currently based in the USA (Los Angeles and Long Beach). In fact, the 2006 San Pedro Bay Clean Air Action Plan is considered by many professional bodies as a global best practice.

Another innovative trend witnessed is the full integration of ports with the circular economy – i.e. addressing the issue of waste and excess energy created by ports. Some ports have become utility providers of waste, heat and waste water. Here, the emphasis has changed from simply mitigating the environmental footprint, to seeing ’being green’ as a competitive advantage and commercial opportunity.

These are the kinds of stories that should be communicated across the media to reassure stakeholders that the necessary steps are being taken by shipping companies to protect the world in which we live. At the moment, there is a fundamental gap between the actions that are being taken, and what is being reported in the press.

Obviously, the media will prefer to run with often sensationalist stories that vilify the industry – this is true of all industries and is not exclusive to shipping. But journalists are also always looking for instances of real innovation, and herein lies a real opportunity to shift perceptions.

Going a step further: partnering with clients on the sustainability agenda

Corporate responsibility is now more than just ensuring that your own organisation is sustainable and responsible; it’s about creating an environment that allows customers, suppliers and partners to behave in a sustainable way across every area that they touch. That’s why companies are looking up and down their entire supply chain to ensure that they are creating the right environment for all parties to minimise their carbon footprint and environmental impact.

Organisations, such as Electrolux, Heineken, IKEA, M&S and NIKE, are now working alongside the Clean Cargo Working Group (CCWG), using tools and metrics to directly review and compare ocean carriers on their sustainability practices, as well as to set their own expectations with target providers for continuous improvement. CCWG is also driving forwards several other initiatives, such as standardising emissions calculations across all modes of freight transport; creating sustainability scorecards; and facilitating a full integration of IT systems to make all of this information reachable at the click of a button.

Shipping companies must align themselves with bodies such as the CCWG. Sustained actions that demonstrate an unwavering commitment to our shared future are the best way to build trust. In an increasingly competitive space, shipping companies must look to find other ways to differentiate themselves aside from simply price. By partnering with their clients to help them reduce their environmental footprint across the supply chain, and even contributing to their annual report in a clear and concise way, shipping companies can become far more than merely a transporter of goods; they can become a preferred partner towards a shared future, and a key asset within a multinational’s sustainability strategy.

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