The Hidden Opportunity in Container Shipping Reading Answers

Mar 19, 2025

The Hidden Opportunity in Container Shipping Reading Answers is a generic topic for IELTS Reading answers. The Hidden Opportunity in Container Shipping Reading Answers consists of 14 IELTS questions. For the given set of questions (Questions No. 27-30), read the passage thoroughly and answer which paragraph satisfies the given statement. After that, for Questions No. 31-35, answer all the statements in either TRUE, FALSE, or NOT GIVEN options. Finally, for the remaining questions (Questions No. 36-40), you have to answer the question in not more than three words.

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Section 1 The Hidden Opportunity in Container Shipping Reading Answers

A. The container shipping industry has been highly unprofitable over the past five years. Making things worse, earnings have been exceptionally volatile. Several external factors are responsible, notably trade's spotty recovery from the global financial crisis, and redoubled efforts by corporate customers to control costs. Some pain is self-inflicted: as in past cycles, the industry extrapolated the good times and foresaw an unsustainable rise in demand. It is now building capacity that appears will be mostly unneeded.

B. These problems are real and significant, and largely beyond the power of any one company to address. But shipping companies cannot afford to throw up their hands and accept their fate. Hidden beneath these issues (and driving them to a degree) is another set of challenges that shipping lines can readily take on. Across the enterprise, in commercial, operations, and network and fleet activities, shipping lines have opportunities to improve performance. In sales, for example, carriers often confuse their costs with the value received by customers and fail to charge a premium for services for which shippers will pay more. In operations, many lines treat bunkers as just another cost of doing business. In network design, more than a few shipping companies use outmoded approaches to design their routes; new and more powerful systems use algorithms to make better, more effective decisions about networks.

C. With a bit here and a bit there, companies that take on a full program of initiatives regarding the three mentioned aspects can boost earnings by as much as 10 to 20 percentage points, enough to reverse the recent trend and return to profit. To realize that kind of upside, however, firms must also ready their change organizations. That's a nontrivial challenge: in many ways, very little has changed in container shipping since the first crane hoisted the first box in 1956. Companies need to find ways to help employees embrace new ways of working and must be prepared to bet on the future. Carriers that embrace change will be better prepared than their rivals to make the best of the current business cycle and thrive in the next one.

D. Some of the challenges that companies face-the supply/ demand imbalance, and swings in demand-are systemic, and beyond the ability of any company to fix. But the rest are readily addressable. Container lines can and must deploy three sets of actions -commercial, operations, and network and fleet-to improve their performance. Companies have a huge incentive to act first the whole industry has moved to a greater level of productivity, the benefits will likely be passed on to customers once again through competition. Several lines are already well advanced on the journey to greater productivity; smart lines can beat the competition by being quicker and more thorough in their implementation.

E. In their marketing and sales, shipping companies need to shift from a cost-plus approach to one that emphasizes value. Lines should get paid full value for the services they provide. A comprehensive commercial program, covering the full gamut of commercial activities from pricing strategy to contracting strategy to uptake management, can deliver immediate bottom-line impact. In our experience, companies can improve return on sales (ROS) by 1 to 2 percent within 9 to 12 months.

F. The approach has many elements; three stand out. First, a “model ship” analysis can help carriers understand which customers contribute most to profits. One global container line used market information to develop its model. Based on this analysis, the company created targeted sales campaigns to pursue and capture high-contributing customers. The campaigns lifted ROS by about 2 percent in several regions and trade lanes.

G. A second element is better commercialization of “last mile” customer services, including detention and demurrage. Many shipping lines have made strides in this area, but more can be done. One global shipping line created a rigorous performance-management system to ensure accurate invoicing and also standardized tariffs across different countries and trades. These two steps lifted detention and demurrage revenues by 15 percent.

H. Third, and perhaps most importantly, lines can improve their pricing discipline to ensure that they reap the full benefit of their value-selling approach. We see clear improvement potential for lines across all elements of the pricing process, from strategic pricing to transactional pricing to the systems and tools used to support the front line. Sometimes it is right to follow the market and price close to the marginal cost to fill the ship. But lines need to promptly identify the peaks in prices (they do happen, even in today's oversupplied market) and the times that they have privileged capacity, and ensure that they are charging to capture both events. This requires building flexibility into contracting so that in the peaks a carrier's ships are not full of low-yielding cargo contracted at annual rates. Carriers can also extract higher prices from customers in certain industries in Europe, to whom reliable transport and the resulting stable inventory are quite valuable.

Section 2 Solution and Explanation

Questions 27-30

Reading Passage 3 has eight paragraphs, A-H. Which paragraph contains the following information? Write the correct number, A-H.

27. a potential benefit that encourages shipping lines to take action as soon as possible

Answer: Paragraph D

Supporting statement: “......Companies have a huge incentive to act first the whole industry has moved to a greater level of productivity, the benefits will likely be passed on to customers once again through competition. Several lines are already well advanced on the journey to greater productivity; smart lines can beat the competition by being quicker and more thorough in their implementation.........”

Keywords: Companies, Incentive, Industry, Productivity

Keyword Location: para 4, Line 5-9

Explanation: Paragraph D highlights the urgency for shipping lines to act quickly to regain competitive advantage. This suggests that companies that implement improvements early can outperform competitors and achieve better productivity gains.

28. two important factors for a specific group of customers

Answer: Paragraph H

Supporting statement: “.......Carriers can also extract higher prices from customers in certain industries in Europe, to whom reliable transport and the resulting stable inventory are quite valuable.........”

Keywords: Carriers, Extract, Prices, Customers

Keyword Location: para 8, Line 11-13

Explanation: Paragraph H discusses how shipping lines can improve pricing discipline and mentions that some European industries highly value reliable transportation and stable inventory, two important factors for this customer group.

29. reasons for the current state of the container-shipping industry

Answer: Paragraph A

Supporting statement: “.......Several external factors are responsible, notably trade's spotty recovery from the global financial crisis, and redoubled efforts by corporate customers to control costs..........”

Keywords: External, Factors, Responsible, Recovery

Keyword Location: para 1, Line 3-4

Explanation: Paragraph A discusses the reasons behind the poor profitability of the container shipping industry, citing external factors such as slow trade recovery and cost-cutting by corporate customers, as well as self-induced overcapacity issues.

30. the maximum rise in revenue a company can achieve once it manages to address all three crucial elements

Answer: Paragraph C

Supporting statement: “.......With a bit here and a bit there, companies that take on a full program of initiatives regarding the three mentioned aspects can boost earnings by as much as 10 to 20 percentage points, enough to reverse the recent trend and return to profit...........”

Keywords: Companies, Program, Initiatives, Aspects

Keyword Location: para 3, Line 1-3

Explanation: Paragraph C discusses how addressing all three critical elements – commercial, operations, and network and fleet – can increase earnings by 10 to 20 percentage points, reverse recent losses and restore profitability.

Questions 31-33

Do the following statements agree with the information given in Reading Passage 3? Write:

YES if the statement agrees with the information

No, if the statement contradicts the information

NOT GIVEN If there is no information on this

31. Most of the challenges that shipping companies are facing are caused by increasing tax rates.

Answer: NOT GIVEN

Explanation: The passage discusses challenges such as overcapacity and cost control, but does not mention tax rates as a reason. This passage focuses on internal reforms rather than external tax factors.

32. Shipping companies are fully responsible for their worrying situations.

Answer: NO

Supporting statement: “........Several external factors are responsible, notably trade's spotty recovery from the global financial crisis, and redoubled efforts by corporate customers to control costs...........”

Keywords: External, Factors, Responsible, Global

Keyword Location: para 1, Line 3-4

Explanation: Shipping companies are not solely responsible for their struggles. External factors such as trade reforms and corporate cost-cutting also contribute to their difficulties. However, some mistakes by the industry made the situation worse.

33. There is room for improvement in various aspects of a shipping line.

Answer: YES

Supporting statement: “........Across the enterprise, in commercial, operations, and network and fleet activities, shipping lines have opportunities to improve performance............”

Keywords: Enterprise, Operations, Network, Fleet

Keyword Location: para 2, Line 5-6

Explanation: The passage shows that there are opportunities to improve various aspects such as sales, operations, and network design.

34. The container shipping industry has undergone significant changes since the first container was dragged up.

Answer: NO

Supporting statement: “.........To realize that kind of upside, however, firms must also ready their change organizations. That's a nontrivial challenge: in many ways, very little has changed in container shipping since the first crane hoisted the first box in 1956. ...........”

Keywords: Upside, Firms, Organizations, Challenge

Keyword Location: para 3, Line 4-6

Explanation: The passage states that little has changed since the first container was lifted in 1956, indicating that the industry has not changed significantly.

35. Companies must set higher standards when recruiting new employees.

Answer: NOT GIVEN

Explanation: The passage makes no mention of the need for companies to set high standards when recruiting new employees.

Questions 36-40

Choose NO MORE THAN THREE WORDS for each answer

36. A comprehensive commercial program to take up and make use of management can make ______________ without delay.

Answer: immediate bottom-line impact

Supporting statement: “.........A comprehensive commercial program, covering the full gamut of commercial activities from pricing strategy to contracting strategy to uptake management, can deliver immediate bottom-line impact...........”

Keywords: Comprehensive, Commercial, Program, Gamut

Keyword Location: para 5, Line 3-5

Explanation: A comprehensive commercial program can lead to quick improvements in financial performance, as it focuses on pricing, contracting, and customer management, which have a direct impact on profits.

37. A “model ship” analysis is used to calculate the main source of _________ and set plans for attracting significant contributors.

Answer: Profits

Supporting statement: “........First, a “model ship” analysis can help carriers understand which customers contribute most to profits............”

Keywords: Model Ship, Analysis, Carriers

Keyword Location: para 6, Line 1-2

Explanation: A “model ship” analysis helps identify which customers contribute the most to profits and create targeted sales campaigns to attract those high-contributing customers.

38. Companies can gain maximum benefit from their ___________ provided that they can improve their pricing strategy.

Answer: Value-selling Approach

Supporting statement: “.........Third, and perhaps most importantly, lines can improve their pricing discipline to ensure that they reap the full benefit of their value-selling approach...........”

Keywords: Importantly, Lines, Improve, Discipline

Keyword Location: para 8, Line 1-2

Explanation: Companies can maximize profits by improving the pricing strategies associated with their value-selling approach, ensuring that they charge for the full value of services, especially during price peaks.

39. Despite today's oversupplied market, the ____________ should be quickly recognized by shipping lines

Answer: Peaks in Prices

Supporting statement: “.........Sometimes it is right to follow the market and price close to the marginal cost to fill the ship. But lines need to promptly identify the peaks in prices (they do happen, even in today's oversupplied market) and the times that they have privileged capacity, and ensure that they are charging to capture both events...........”

Keywords: Follow, Market, Price, Marginal

Keyword Location: para 8, Line 5-8

Explanation: Shipping lines must quickly recognize price peaks in the market, even if it is oversupplied, to maximize their profits by adjusting prices accordingly.

40. For European customers, reliable transport and ___________ are two important aspects

Answer: Stable Inventory

Supporting statement: “.........Carriers can also extract higher prices from customers in certain industries in Europe, to whom reliable transport and the resulting stable inventory are quite valuable............”

Keywords: Carriers, Extract, Prices, Industries

Keyword Location: para 8, Line 11-12

Explanation: European customers value reliable transportation and stable inventory, as this helps them manage supply chains efficiently. Maintaining stable stock levels prevents disruptions in production and sales.

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