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The Conversation - July Edition

Jul

Welcome

Welcome to the July edition of The Conversation.

In this issue, we outline the reputational challenges that transport and logistics companies face today, and explore what opportunities exist for them to build trust with key stakeholders.

In our “Insight” section, our own Tom Clive argues that transport and logistics companies need to become bolder in communicating their efforts and innovations in terms of sustainability.

We are also grateful to Tim Cottew, Director at PT PSU Parent Company of PT GoLNG Indonesia and PT Equinox, and Richard Joy, Editor for Port Technology International for weighing in on the industry’s road to transparency within the “In Focus” section.

Below you can also read about our recent and exciting Sermelo and client news.

A Word from our Founder

With the recent fall in oil prices, many organisations operating in transport and logistics are experiencing short-term economic relief.

During this time, transport companies are presented with a great opportunity to reinvest in energy-efficient technology or renewable energy. Whether this change is a steady progression, or more of a disruptive force, remains to be seen.

The aviation industry is one segment of transport that is in the midst of a rapid transformation. Aviation companies are investing in fuel efficient 787 Dreamliners and A350-800s. In fact (as reported by the BBC) not a single airline placed an order for the fuel-thirsty 747 or 80 models in 2014.

In the B2B space, rapid transformation has yet to materialise, but may be just around the corner. Already, there are some fantastic measures in place that are driving efficiency (Tom Clive will explore later on these as seen in the shipping industry), but perhaps these types of industries need to be bolder and more proactive in their communications.

The issues around sustainability are set to stay. According to research from the International Transport Forum, transport is responsible for 23% of world CO2 emissions from fossil fuel combustion. These emissions are set to double over the next 40 years.

In today’s world of hyper transparency, ignorance is no longer a form of defence.

The winners will be those companies that embrace sustainability, and proactively communicate the concrete, measureable actions that create mutually beneficial solutions for companies and stakeholders alike.

Sermelo News

We are pleased to welcome Ina Strander to our team, as a Senior Consultant. Ina is a communications professional who has gained a broad range of public relations experience working with clients in sectors including technology, oil and gas, energy, travel and destination, as well as FMCG.

Her expertise spans corporate profiling and reputation management, sustainability, employee engagement and media relations. After working with clients and PR campaigns across the Nordic Markets, as well as agency experience from both Oslo and Copenhagen, Ina has extensive knowledge of the region and the key differences in approaching media and stakeholders in the local markets.

Ina joins us from Gambit Hill+Knowlton Strategies in Oslo, Norway, where she worked on a range of global and local activations, including the Diamond SABRE award-wining campaign for the Norwegian Department for Development Cooperation.

Elsewhere in Semelo news, we’ve also created a video showcasing what goes on behind the scenes at Sermelo – have a look over on our YouTube channel to find out more!

Client News

Eaton

We are delighted to announce we are working on a series of new projects with Eaton, a power management company providing efficient and sustainable solutions to its customers, to help raise their profile in the Life-Safety space. As part of a broader campaign in selected markets, we are working to develop content to help position Eaton as an expert and thought leader in this area, focusing on employee safety and the impact of evacuation on businesses’ reputation. We are also working on a consumer campaign in the Norwegian market, positioning Eaton as the expert in smart and safe solutions for residential property.

FM Global

We recently launched the Resilience Index, developed by FM Global, which is the only study in the world to rank 130 countries by their overall resilience; combining economic, risk and supply chain qualities to form an overall global ranking.

Generating coverage across national and trade publications – from The Daily Telegraph to Management Today – the index and its content have been well received, and will continue to form a core part of FM Global’s communications over the coming months.

Puy du Fou

The medieval French theme park – an hour outside of Nantes – has been receiving some rave reviews, following the beginning of its season. The Guardian described it as “France’s best kept theme-park secret” and a leading blogger perfectly articulated what makes it so “brilliantly” unique.

GRI

We have been working with the Global Risk Institute for Financial Services (GRI) to announce two senior appointments at the Canada-based think tank; Dr Tiff Macklem as its Chair, and Richard Nesbitt as President and CEO.

The Forum

Tim Cottew, Director, PT PSU Parent Company of PT GoLNG Indonesia and PT Equinox

www.golngindonesia.com

www.ppequinox.com


What are the reputational risks currently facing transport and logistics companies?

Transport and logistics companies have to deliver contracted services on time; economically; without damage or loss; and in an environmentally friendly and sustainable way. Non-performance can fundamentally damage a company’s reputation.

In an economic downturn, such as today’s, clients are seeking even more efficiencies in all aspects of their activities. They rely heavily on their logistics providers to provide “Just in Time” delivery to reduce the carrying costs of goods/dead stock and they will seek lowest cost logistics services whilst expecting the highest levels of service. These companies must also constantly seek ways to increase efficiency and reduce costs, whilst at the same time delivering or exceeding the level of services expected by their clients. Failure to do so will undermine their reputation either gradually or irreparably.

Today, ‘Corporate Social Responsibility’ is taken very seriously and needs to be part of the company’s corporate planning. This should be a genuine commitment and not just an exercise in ticking the box. Clients will consider this aspect when choosing a logistics partner.

In addition, this is a capital intensive industry and sound financial management is required. Major stakeholders need to be kept advised on a company’s overall performance.

Whatever the industry, companies will face reputational challenges. Transport and logistics companies are no exception. With greater access to mass information and online communication, a failure in any part of the company’s performance will rapidly be known by competitors, clients and other stakeholders. The adage that bad news spreads faster than good news is even more relevant today. This rapid flow and spread of information presents major challenges to any company’s reputation.

What are the communications opportunities for these companies, in order to build trust with key stakeholders?

Corporate communications is a very important tool for a company with long-term vision.

To be effective, corporate communications must be: open and transparent; factual; honest, consistent; and acknowledge failures, not just successes.

This is the platform to communicate with investors in relation to the company’s operation and performance, which underlies their investment’s performance and prospects; with clients regarding longevity, experience, robust supply chains, control, valued added, network coverage amongst others and; not least, with employees.

Corporate communications is the medium to reach the broadest base of a company’s stakeholders, including shareholders, clients and employees. Inconsistent and self-serving communications will lead to distrust and will destroy loyalty.

Do transport and logistics companies need to become bolder in communicating their efforts and innovations in terms of sustainability?

Undoubtedly yes. Internet and mass communication is a free powerful tool that has been shown to influence decision making at the highest level. Through the internet some transportation businesses have expanded rapidly both on the local and international level.

New ideas and innovations need to be pushed to the market through effective communications.

Bold communication is fundamental to retaining stakeholder trust, and is integral to both survival and growth in today’s markets.

Richard Joy, Editor, Port Technology International (PTI)

What are the reputational risks currently facing transport and logistics companies?

In an era in which modes of operations are getting faster, and traditional job roles are evolving into a more technical arena, key areas of concern include the demystification of the famed ‘human element’, and of course, environmental friendliness. There is considerable paradigm-changing thought that we get a first-look into at PTI, and, no pun intended, it is not all hot air. If logistics companies are awake to the drive to focus on people and processes, they can improve reputations as well as optimise operations, all the while becoming more holistically sustainable businesses.

What are the communications opportunities for these companies, in order to build trust with key stakeholders?

Social media has become a direct way to break barriers that once made companies seem impenetrable. We’ve seen Maersk do amazing things by providing a tangible narrative to their operations, and not only can this provide people with access to companies, but also vice versa, thereby creating a mutual dialogue. In terms of how this can aid trust with stakeholders, it is a vital way whereby stakeholders begin to see the ways in which their companies can make them valued and respected members of supply chains and societies.

Do transport and logistics companies need to become bolder in communicating their efforts and innovations in terms of sustainability?

Yes, however they must be cautious to emphasise how such efforts and innovations have become part of a company’s modus operandi, not a result of a demand. This ensures two things; trust in the market and the foundation for a long and sustainable future. In turn, this avoids falling into a trap of ostensibly appearing to make changes due to political and/or social pressure and allows a business to progress into the coming demands of the future naturally. People are aware that not everything can be sustainable all the time, and that shipping is still the greenest mode of transport, so there can be happy mediums that combine economic necessity and sustainability.

Insight

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.

Out and About

An evening with the London Symphony Orchestra

On Thursday 7 May, the Sermelo team had the delight of an invitation to take a trip to London’s Barbican to listen to the London Symphony Orchestra’s recital of Brahms and Tchaikovsky taking place in correspondence with the International Violin Festival. Some of us are seasoned classical music fans and some are most certainly not, but despite our varying degrees of classical music appreciation, we were all enraptured by the performance.

The LSO has long been pioneers in making classical music accessible to all. This is certainly highlighted by its annual outdoor summer concert that takes place in Trafalgar Square and is free for all to attend. It has also recently launched its online ‘Find me a concert’ tool which allows visitors to roll a virtual dice to help them decide on which upcoming LSO concert would be best for them to see – regardless of their experience in attending  classical music concerts or it is their first time.

The performance we attended showcased the critically acclaimed Isabelle Faust alongside the LSO, playing Brahms’ Great Concerto on a violin made in 1704, named ‘Sleeping Beauty’. The instrument came by its nickname, having been stored, and un-played for around 150 years, locked away in the cupboard of a German aristocrat and then reappearing in a Swiss safe. Faust heard of this very intriguing violin, and set herself the mission of finding it and becoming its owner – a mission that proved successful, and something that we, as an audience, could feel a part of.

What was particularly powerful about the performance was the harmony in which the orchestra played together along with Isabelle and the history of the ‘Sleeping Beauty’.

It was an evening of quiet and peaceful contemplation, in stark contrast to the political drama of election night unfolding outside.

British American Business | London Insight Series | Emerging Markets Outlook

Much has been made of the BRIC economies, but for some time now, they have not been the economies to watch. Instead, investors are more concerned with the next generation of emerging markets, and this was explored at a recent breakfast briefing session.

Bloomberg News’ Gavin Serkin has visited the top frontier markets as identified by ten fund managers, and, in his new book – Frontier – outlines his findings as experienced first-hand, supported with data. He shared an excerpt with us, and took us through his account of being in Egypt around the time of the revolution, and being detained by security forces, which was gripping.

Simon Jenkins, Chief Economist for the Middle East and North Africa at HSBC, also spoke about his views on the emerging economies that we should be keeping an eye on. He articulated the importance of being prepared to invest for the long-term, and also of managing the very specific challenges facing these countries – infrastructure, culture, political environment and so on.

Nigeria, Vietnam and Argentina were identified by both as three leading investment destinations. Many investors are excited about navigating these challenges during the early stages of investment, and seeing these evolve and yield results over the coming five, 10 and 20 years – and beyond. We too will be keeping a close eye on them.

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