Risk mitigation in service industries: A research agenda on container shipping

Abstract

Shipping lines face various marketing risks, with outcomes that need to be mitigated. A current, serious, example of this has been the COVID19 pandemic and the severe supply chain disruptions that followed it. During such times, unmitigated marketing risks can lead to corporate failure, significant losses, or irreparable adverse impact on a carrier's brand name, due to sailing schedule unreliability. We cast a look at the marketing risks of shipping lines deriving, for instance, from adverse market developments, competitor moves, operational mistakes, unreliability (schedule integrity; supply of containers to customers, etc.), and we propose avenues of risk mitigation. Our methodology includes a combination of literature review and Spherical Fuzzy Theory. Among other conclusions, our results show that it is the ‘unexpected’ and ‘unanticipated’ -e.g., a natural disaster; a war; a tsunami; or COVID19-that poses the greatest risk to carriers: Intense competition amongst them, geared to short-term profit maximization, and coupled with the fine-tuning of capacity management within alliances, does not allow them the luxury of affording built-in buffers or slacks that could ‘absorb’ the unexpected. Not unexpectedly therefore, COVID19 has been the greatest risk factor of all times, mitigated –quite profitably one should add—by the joint capacity management of global shipping alliances.