What can Zim learn about its reputation from the reaction to its cooperation agreement with 2M

A perception audit is the gold standard for comprehensively evaluating the impressions and attitudes that are held about a firm. You can’t manage what you don’t measure, and…

A perception audit is the gold standard for comprehensively evaluating the impressions and attitudes that are held about a firm. You can’t manage what you don’t measure, and a full-scale survey – especially if the assessments are conducted regularly – helps to accurately identify the causes and effects of your company’s actions on its reputation.

Perception audits are most commonly used to identify knowledge gaps and help with strategy repositioning. In recent years I’ve also seen results that indicated a vulnerability to shareholder activism, as well as ones that helped to pinpoint cultural issues that were impacting hiring.

This sort of analysis takes time and resource. It’s sometimes possible, however, to get a small sliver of that insight just for the cost of distributing a press release.

In shipping, there is one significant example of this that we can take from recent months. In 2018, the 2M Alliance of Maersk Line and MSC announced the beginning of a long-term cooperation with Israeli carrier Zim. All three container liners are major players and rank in the Top 20 of Alphaliner’s TEU capacity league table, but the headline coverage each received differed subtly, but materially.

A good headline summarises an article and draws the reader in. Unfortunately you’ve only got about ten words in which to do it. This means that a publication is only going to highlight the most newsworthy aspects of a story in a way that will appeal and be most relevant to the demographic it caters to. What they say is a credible indicator of that company’s status in its market, and the perception that its editors and journalists have of its relative status.

Canada: Maersk, MSC and ZIM enter strategic cooperation on the Asia–US East Coast trade

Chile: Maersk y MSC firman acuerdo de cooperación con naviera israelí ZIM 

China: Maersk Line partners with MSC, ZIM on Asia-U.S. East Coast trade

Denmark:
Maersk Line og MSC trækker nyt rederi ind i folden på stor rute
Maersk Line and MSC enter strategic deal with Israeli carrier
Maersk, MSC og ZIM indgår strategisk aftale

France: Zim se rapproche de l’alliance 2M

Germany: Maersk, MSC und ZIM – neues Bündnis im US-Verkehr

Global:
Handy Shipping Guide: 2M Container Shipping Alliance Partners Join Services with Another Freight Carrier
IHS Fairplay: Maersk Line and MSC strike vessel-sharing deal with ZIM in Asia-US trade
Lloyds’ List: Zim enters strategic co-operation with Maersk and MSC
Port Technology: Maersk and MSC Collaborate with New Carrier
Reuters: Israel’s Zim to cooperate with Maersk, MSC on Asia-U.S. trade
TradeWinds:Zim teams with Maersk, MSC from Asia

Israel:
Israel’s Zim joins global shipping alliance
Israel’s Zim strikes alliance with global shipping giants to share routes

Italy:
Zim, Msc e Maersk si alleano sulla Asia-East Coast
ZIM breaks into 2M
Maersk e MSC siglano un accordo di cooperazione strategica con ZIM per le rotte Asia-USA East Coast
Zim in vessel sharing con i due colossi di 2M

Netherlands: Maersk en MSC met Zim in zee tussen Azië en oostkust VS

Portugal: Maersk Line e MSC firmam acordo de cooperação estratégica com a ZIM

Spain: Maersk y MSC cooperarán con naviera israelí ZIM

Turkey:
ZIM, Maersk Line and MSC Agree New Cooperation
Maersk ve MSC, İsrailli ZIM ile işbirliği yapıyor 

USA:
ZIM-2M tying Asia-U.S. East Coast loops
ZIM, Maersk Line and MSC enter a strategic operational cooperation on the Asia-US East Coast trade

What have we learned?

  1. With more than 7.2m TEU, MSC and Maersk dominate the top two positions in Alphaliner’s consolidated figures, and Zim’s total capacity will only add around 5% to the total TEU. So it should be no surprise that MSC and Maersk are the bigger draws. There’s no shame to this, there are very few other lines that would get equal billing.
  1. Though the Haifa-headquartered carrier has around 1.5% of global market share, many publications’ copy editors don’t believe it has the name recognition to be listed solely as ‘Zim’. Perhaps most gallingly, and despite it being the national carrier, all the Israeli newspapers had to provide context to explain who Zim is.
  1. Zim’s scope of operations is predominantly Asia-Europe and Asia-North America, and it appears that its name recognition is greatest between the latitudes of 45 and the equator that match those routes.
  1. Outside of this range, there is much less interest. Certainly only one out of three of the Danish titles even named it in their titles, and there’s almost no coverage from South American or African titles – despite operating four (FA2, FA3, SA1, and FAX) Asia-Africa routes, one covering Asia – South America East Coast, and one covering the Mediterranean – South America East Coast. This suggests that Zim is such a minor player in these regions that its activities simply aren’t considered newsworthy. The only mention I could find was in Chile, in which no guidance was needed in the headline on who MSC or Maersk were, but Zim required an “Israeli shipping company” suffix. Zim tried to sell its deep-sea operations in late 2016 so that it could downsize into a regional Mediterranean carrier, and the headlines reflect this reality.
  1. By being Israel’s national carrier, Zim is guaranteed state cargoes. The downside of this is that its ships aren’t allowed in the numerous Middle Eastern ports of countries that don’t recognise Israel. It’s likely that this explains at least partially why there was so little coverage of this news in a region it has long considered home turf: it’s not germane to many of those publications’ audiences.
  1. All three top tier shipping titles (IHS Fairplay, Lloyd’s List, and TradeWinds) believe their readers are sufficiently aware of Zim that they doesn’t need to provide further context about it.

Anyone that’s not a global carrier has to create a business plan that reflects the limited capacities of its assets, its trade lanes, and the value that distinguishes it from other carriers in its niche. It does this based upon the assumption that it will have customers who will pay a premium for a service that the larger carriers can’t or won’t offer. In recent years, for example, Matson has claimed to be able to recoup a premium on its expedited trans-Pacific service; but while these strategies may be logically watertight, experience has long shown they aren’t a guarantee of keeping you afloat.

Certainly this is by no means a thorough perception audit – it’s not looking at sentiment, social media perception, or doing what we’d always advise – talking directly to key stakeholders. But there’s a lot to be said for seeing how you can extrapolate from a readily available dataset. In this instance, much of what we’ve learned about Zim’s reputation will not surprise. Back in 2016, then CEO Rafi Danieli said Zim had become a “global niche carrier.” It was a phrase repeated by current CEO Eli Glickman when he was appointed, as well as when he announced the positive results in the second quarter of 2018, and it appears to be the defining plan moving forward. And, for what it’s worth, it’s a strategy that appears to have mostly worked: the areas that Zim is focusing on broadly align with the coverage that it has received.

Whether the strategy – in conjunction with this partnership – will prove compelling enough to create defensible value in an oversupplied market remains to be seen.