How a Company Can Show Great Results under Conditions of Crisis


In current article will be investigated an ability of a company to achieve great results notwithstanding unstable state of affairs in global economics. As an example will be taken the intermodal logistics company. Based on the financial results of the company, the possible strategy of its actions will be researched in the article.

Keywords: logistics, supply chain management, customers, integration, conditions of uncertainty, improvements.

Unstable state of affairs in global economics has become something habitual lately. One thing that almost all companies have in common is suffering from it. However, each rule has its exceptions, and this is LIM Logistics – a company, which not only has not suffered but also has developed some successful improvements.

In their book Designing and Managing the Supply Chain, Simchi-Levi et al. (2002, p. 1) define supply chain management as follows:

“Supply chain management is a set of approaches utilised to efficiently integrate suppliers, manufacturers, warehouses and stores, so that merchandise is produced and distributed at the right quantities, to the right locations and at the right time, in order to minimise system wide costs while satisfying service level requirements.”[1, 1]

LIM shows a constant improvement of its schedule reliability notwithstanding declining global performance and has become one of just 4 carriers that ameliorated their results. LIM still invests considerable efforts that are focused on all aspects of customer service, with schedule reliability a high priority objective of the company’s strategy.

According to the recent Global Liner Performance Report, published by SeaIntel Maritime Analysis, LIM’s schedule reliability ranking has risen by 7 spots, so the company has been placed among the most improved in the industry.

LIM has recently announced that following its successful restructuring it will introduce a new global functions initiative aiming at making LIM more commercially focused, agile and customer oriented.

The results of 2014 third quarter included the effect of the debt restructuring along with other accounting effects. On a Non-GAAP basis (excluding the impact of those effects), LIM finished the quarter with $51 million EBIDTA, a betterment of $23 million compared to the previous quarter, and $37 million compared to the corresponding quarter last year. LIM is executing its business plan, focused on advantageous lines where the company offers added value to its customers, while improving and upgrading its points of interface with them and continuing to improve its operational efficiency. The company continues the realization of its strategic plan in order to improve its results and its operational efficiency.

LIM teams keep contact with their customers during the whole logistics procedure, starting from the devising process, making sure the manufactured part can be transported on a container vessel, on through the planning and accomplishment of the actual shipping process, until the cargo arrives at its destination.

LIM is developing global network of services and lines, united with an extensive regional feeder system, makes it possible to send your cargo to any place in the world and on time. There is general agreement that competitive supply chains employ well-integrated logistical processes. The research also shows that superior logistics performance is an award for high achievement on supply chain logistics integration competencies. The analyses identify that customer and internal integration are the most significant differentiators of overall firm performance.

While improving its performance, LIM set in motion the following types of integration: customer integration, internal integration, material/service supplier integration, technology and planning integration, measurement integration and relationship integration. [2, 32]

Strategy of Making Decisions under Conditions of Uncertainty

In order to make a decision under conditions of uncertainty, the task should be formalized.

I – fuel price:

P1 – price is falling;

P2 – price is raising.

II – demand:

D1 – demand is raising;

D2 – demand is falling.

Possible situations:

Q1 = {P1; D1} – price is falling, demand is raising;

Q2 = {P1; D2} – price is falling, demand is falling;

Q3 = {P2; D1} – price is raising, demand is raising;

Q4 = {P2; D2} – price is raising, demand is falling;

Alternative solutions:

Х1 – to offer added value to its customers, while improving its operational efficiency;

Х2 – to make discounts for attraction of new customers.

Table 1. Utility Matrix



Q1 Q2 Q3 Q4 MM H N HW (c=0,4)
X1 $146 million $110 million $121 million $86 million $86 million $146 million $115.75 million $122 million
X2 $139 million $124 million $113 million  $91 million $91 million $139 million $116.75 million $119.8 million


The operating cash flow in 2014 amounted to $121 million. By the end of 2014 fuel prices have fallen till $348.50 for ton, and, although these prices remained unstable, this reduction contributed to the improvement in Q4. Moreover, the demand has increased and consequently the amount of sales has risen.

According to this matrix, the company was disposed optimistically. The chosen decision Х1 could be chosen either while using high-K, or while using HW-K (0.5 < С ≤1).

Possible situations, connected with changes of the fuel prices, may be represented in the context of the following method:

Q1 – price increased and then increased more;

Q2 – price increased, but then fell again;

Q3 – price decreased, and then increased;

Q4 – price decreased and then decreased more.

During making the forecast the following question is stated: to buy the fuel while the price is in point A (Figure 1), reasoning from probability, that it can increase even more, or to wait, counting that the price may fall. In this situation it would be hard to make exact forecast as the fuel prices fluctuated and still remain unstable.

Figure 1. Changes of The Fuel Prices