Most of the container businesses move COC containers. But did you know that there are successful SOC operators, who run in the niche market? This masterclass gives you some useful lessons on how it all works.
Since 2006, Daniel Li, Managing Director at China SOC line, has worked in the maritime business.
China SOC Line is a carrier, owned by China’s Ministry of Transportation. It has expanded its network globally since 2012. It carries only SOC containers through its vessels and slots. That means the carrier itself doesn’t own any containers. The business model is solely built on providing help to SOC owners while being neutral:
“We don’t own the containers. We don’t compete with our clients.”
What you need to start as a SOC operator
Imagine a SOC container that needs to be moved from Hamburg to Shanghai. Other than arranging the cargo and the space on the ship, the container owner should find a partner in Shanghai that can handle the container, when it arrives there.
“They [the partner] have to monitor your equipment, make sure that the container is returned to a proper place. So, if you want to be an operator, you have to have your own network,” Daniel Li explains.
Lesson 1 – Gain an agency network
Therefore, to be able to deliver the full operational support for your clients as a SOC operator, you have to first, have local partnerships and networks that’ll help you handle different situations.
Lesson 2 – Make sure you have cargo partnerships
This one sounds like an obvious step into business development. After you have good connections in your place of interest and have a vessel, you need clients who have SOC containers and cargo to be moved.
Lesson 3 – Get extra slots with shipping lines
The next big thing is booking a space. Within their own capacity, China SOC Line can’t solve 100% of the space requirements, but they have a good relationship with big lines. They can book extra slots with them. This again puts forward the importance of having a large network and solid work relationships.
Lesson 4 – Be aware that people don’t know much about SOCs
As Daniel Li explains, since the SOC business is still a niche market, very few people understand it. Especially those from the shipping lines:
“When you book with them as a SOC operator, they want to help you, but they don’t know how to”.
There are two things he highlights:
• The shipping line system is always accustomed to COCs
• People don’t speak the SOC language.
Mostly, they don’t know who is responsible for what:
“You’re never sure about who you want to talk to. That is time-consuming… When you say free-in, free-out – they don’t know what you mean,” says Daniel Li. So, being aware of that and adjusting is key.
Why run a SOC vessel?
But as a SOC operator, whenever an issue arises in the process, it’s important to be able to quickly detect a problem and figure out how to get the right person to fix it. Something that’ll set you apart from many major COC carriers.
As you see, it’s not a simple business to step into, but the opportunities are many in this niche. Our latest report showed that just 10% of forwarders could source a SOC and organise the shipment from China to Europe. The SOC owners need assistance and a proper system that speaks to their needs. Giving SOC operators a head-start in this business.