IRANIAN SHIPPING COMPANY DIVERSIFIES TO THE UK
Pars Sea Speed Shipping Services Ltd (PSS) is a private Iranian company whose management team possess industry experience spanning over 35 years. PSS’ core objective is to handle complex cross trade shipments and logistics across land, sea, and air with precision and efficiency to shipowners, operators, and charterers. They work 24 hours a day, 365 days a week!
The company held 15% of the market share. They aimed to use the London office to diversify their portfolio and gain access to a new pool of demand, with a target to increase market share to 50% over the next 3 years.
The Covid-19 pandemic was testament to the importance of the shipping industry. In these unprecedented times, the ability of the industry to continue undisrupted transportation of food, energy, and medical supplies across continents proved to be critical to global welfare.
Furthermore, the UK is home to the majority of the prominent Marine Insurance Institutes worldwide. All things considered, PSS’ management team identified an opportunity to expand operations to initially penetrate London, before strategically infiltrating other regions in the UK.
THE NEW MARKET
The proposed expansion will contribute towards multiple industries in the shipment and logistics sectors of the United Kingdom.
The cargo shipping market is forecasted to grow at a CAGR of 3.8% during the forecasted period 2021-2026 to reach $15.3 bn
The UK Freight and Logistics market is anticipated to register a moderate growth rate of 2.5% during 2021-2026
The logistics sector contributes £127 bn of Gross Value Added (GVA) to the UK economy
Online retail averaged 28.1% of retail sales in 2020, up from 19.2% in 2019
WHY THE UK WAS THE NEXT STEP FOR PSS SHIPPING SERVICES
Primarily, it came down to the goals and ambitions of the management team. They already had a good business and a sizable market share in Iran, but they knew that establishing a presence in the UK would contribute significantly towards their target of increasing that market share considerably.
Among many choices stretching from East Asia up to North America, the UK is an exquisitely positioned hub for the global maritime sector, bringing together the shipping, ports, services, engineering, and leisure marine industries. For this reason, Pars Sea Speed Shipping Services ultimately decided to set up their first overseas branch in the heart of the global shipping industry, London.
The company was confined to a market with limited growth opportunity – which could have led to business stagnation. The plan was to expand the already successful operation from Iran to the UK. Now they would have access to a new pool of demand, a new currency, a new economic environment, a diversified workforce, and most importantly, enhance their worldwide credibility and reputation.
HORIZON IMMIGRATIONS TO THE RESCUE AGAIN
Our analysis showed that there is significant demand for shipping services in the UK and PSS were determined to capitalize on that.
The natural concern for any company contemplating expansion is the penetration strategy. PSS’ management wanted to know the specifics of how lucrative the expansion would be, how long it would take to break even, and more details about their competitors so they could tailor their services to the market needs.
Luckily, Horizon immigrations was on hand to address all doubts. PSS Shipping Services was already a well-oiled machine in Iran, but they wanted a soft landing in the new market. We developed a strategic plan, detailing exactly how they could penetrate the UK market and start maximizing revenue with immediate effect.
Included in the business plan was:
Proposed service offerings
Industry and market analysis
Proposed management structure
Economic rationale and demographics
Growth potential analysis
The head of operations was appointed to be the sole representative in the UK. He possessed the skills and experience to see through the set-up process and be responsible for the operational and managerial activities of the new branch. An additional benefit for the sole representative and His family is that they get UK residency immediately, with eligibility to apply for citizenship in 5 years.
THE BENEFITS OF INTERNATIONAL EXPANSION FOR PSS SHIPPING SERVICES
Considerably higher potential for revenue maximization
Access to new clientele
Reduced exposure to one currency, market, and political environment
Revenue generation in another stable currency