In an exclusive interview with SME Times, Franck Dedenis, Managing Director, Maersk Line India said it is a challenge today in the logistics sector to maintain profitability and market share in a scenario flanked by a global economic slowdown, rising operational costs and infrastructural bottlenecks.

                                                                        Excerpts of the interview...

Indian logistics system is quite challenging as it is difficult to supply goods within a stipulated time period. There is delayed in shipments due to many reasons. How do you help Indian SMEs to deal with this challenge? You also provide online solutions to your customers. Does it make business faster and if so, how?
Franck Dedenis: As a shipping company we have direct control over only the ocean transportation of cargo to and from India. However, we do realize the challenges that a lot of our SME customers face here in India. In order to allow them to add more dependability to their services and to ensure that remain competitive in global markets from a "go to market" perspective, our services out of India offer 4 major advantages to customers:

1. Our Transit times are extremely competitive & we maintain a schedule reliability of over 90% on most of our services, which is much higher than the current industry average.

2. It has been our endeavour to increase our penetration of the Indian Hinterland where most of these businesses are located so that our customers are able to access us easily and quickly. For instance we have 25 offices and 60 odd acceptance points inland, 14 of which are with CFS's.

3. We also have payment counters closer to the customers' businesses to quicken the transaction process for them.

4. We are perhaps the only shipping line to provide our customers with a complete online suite which enables them to book, pay for and track their shipments online thereby making it not only faster but also more convenient for them to do business with us.

What kind of value addition do you provide to SMEs for shipping products overseas?
Franck Dedenis: Inspite of the slight economic setback in the past couple of years, we have ensured that we are more than a carrier for our customers. We prefer to be enablers for their business because we provide them with services that allow them to effectively put themselves on the global map.

So, how are you taking the initiatives?
Franck Dedenis: To do so, Maersk Line has taken a number of initiatives on the process and the product front:

In keeping with Market trends, our services out of India have been tweaked to cater to the Emerging Economy trade boom, alongside the US and Europe and we have been working on increasing Port coverage in India as well. We call 14 ports in total, in India.

We have added Krishnapatnam as a port of call on our Chennai Express service from the Far East and we have also added Busan in Korea as an additional port of all on the same service. We have the Mawingu Express which connects India to Kenya, East Africa and we cover West Africa through our ME1 & ME4 services which then connect to 13 different feeder services from Algeciras. We have a dedicated Cashew Express service every cashew season into Bissau, Cotonou & Abidjan
And then we have the Bossa Nova to Latin America.

Apart from providing customers with schedule reliability & our online business suite, we are also working towards creating a positive customer service experience for our customers. Our Customer "CARE" program is based on 4 key parameters which also form the basic tenets of our service culture:

Dedicated Single Point of Contact: Customers will now have a personal CARE Business Partner assigned especially to look after their account.

Seamless Connectivity: Customers can now reach out to your CARE business partner on a direct contact number or email id.

Proactive Shipment Management: Given the dynamic nature of our business, we update the customer proactively on the status of the cargo throughout the shipping cycle.

Prompt Issue Resolution: The CARE business partners are subject matter experts. So, they will be in a position to attend to customer issues with alacrity while also ensuring that customers have the best possible solution, given the circumstances.

In fact, our customer service team is accessible to customers 24X7 through the online chat system. The team handles close 4000 queries a week through this platform.

How are you expanding your network in India?
Franck Dedenis: As mentioned earlier, we have increased our footprint in India to get closer to the business catchment areas in the Indian Hinterland and included additional ports of call to our services (Hazira & Krishnapatnam this year and Mundra last year). The objective was two-fold: (1) to be more accessible to our customers (2) Assisting our customers to reduce cost either through reduction in inland transportation cost and allowing for ease of operation.

In a market like India, we also need to have an agile/flexible company policy -- become better with exception management, so the organization is continually taking steps to make it easier for customers to do business with us. For example, making equipment repair facilities available closer to equipment pick-up points. This facility has been received positively by customers.

What is the major constraint today in India for the supply of goods to and fro? How do you thing this can be mitigated?
Franck Dedenis: The single biggest challenge that we face today is that of maintaining profitability and market share in a scenario flanked by a global economic slowdown, rising operational costs and infrastructural challenges.

While the Government of India is looking towards improving infrastructure within the country, important developments such as the much needed Dedicated Rail Freight Corridor (DRFC) are still work in progress. In our experience there is tremendous scope of improvement with regards to the Terminal capacity & Cargo carrying capacity of the Indian Railways. Bridging this infrastructural gap would reduce the logistics cost in India substantially. The overall logistics cost in India is 13-14% of GDP as compared to 7 to 8% in developed economies today.

With the awarding of infrastructure status for inland waterways and inland ports, the construction of ports under private sector has picked up. However, out of the many private/captive port projects involving capacity addition at various stages of evaluation and implementation, only a few have been operationalized / implemented. Development of other ports is under slow progress, which needs attention of all concerned for early execution. India needs a few world class ports and smaller operational ports so that we can effectively utilize the hub and spoke model.

We are aware that there is a plan to develop 54 new berths through PPP model in the next five years, which need to be hastened to relieve the port congestion problem. India's weak export infrastructure in the ports such as congestion problems, insufficient bulk terminals and the Coastal Regulatory Zone Act, need to be addressed.

In addition, efficiency in cargo handling needs to be improved to reduce the dwelling time of ships, which is higher when compared to international standards. It has also been observed that while PPP based infrastructure projects in some sectors have displayed good progress, several others achieved only limited success. Issues relating to project implementation, monitoring and dispute resolution are among the key concerns of the infrastructure developers.

Greater transparency of the regulatory landscape here in India and proactive decision making on reforms are important facilitators if India wants to maintain its competitive edge and provide a more conducive environment for international trade. It's especially important to do this in order to reduce the current account deficit and to spur on exports to balance out the trade deficit.

Tariff setting is another major issue, which limits private sector investments in the sector. Cabotage laws are an incessant show stopper at times and also contributes to increase in shipping costs for the line and consequently for the customer.

Could you tell us more about your network and how potential products reach many countries in the global market?
Franck Dedenis: It would be extremely difficult for me to describe our entire network and scope of coverage simply because it's really just like a giant spider web ! We call perhaps all the major ports around the world. In fact, we have services to most of the ports in the world. Maersk Line is the largest container shipping company in the world with a fleet comprising 600 vessels and a number of containers corresponding to more than 3,800,000 TEU. This ensures a reliable and comprehensive coverage worldwide.  Just to give you an interesting example, in 2009, our vessels made around 35,000 port calls - equivalent to approximately four port calls per hour or one call every 15 minutes.

Maersk Line has close to 16,500 employees across 325 offices in more than 125 countries in which it operates. As a leading provider of container shipping, Maersk Line’s vision is to create opportunities in global commerce. Maersk Line helps customers source goods from anywhere in the world, creating efficiencies in their supply chains, and making it possible for commodities to reach new markets more quickly. Specifically from India, there are services from all major ports here in India into North & South America, Europe, Africa, South East Asia and China – which pretty much covers the entire world.

(Namrata Kath Hazarika can be contacted at namratakh@tradeindia.com)