September 02, 2003

The Shipping Journal
http://www.etshipping.com

Shipping being a global business in the true sense, getting into other markets should be a priority?

Transworld Group is a success story of true transformation. The Group, which represents five foreign shipping lines in India, has forayed into many related segments, setting benchmarks for other liner agents in the country to follow. Their growth is commendable at a time when foreign lines are opening up their own offices in the country, and many local liner agents are floundering.

Apart from representing principals in India, Transworld has major business interests in shipowning, ship management, feedering, freight forwarding and logistics. The Group has also made a successful foray into neighbouring countries. The Group companies include Clarion Shipping, Orient Express Lines, Balaji Shipping (UK) Limited, NLS Agency India, Transworld Shipping Agency (I), Crescent Shipping Agency, Meridian Shipping Agency, Clarion Shipping, Transcorp and Trident.

V Ramnarayan, Transworld’s Vice Chairman and Managing Director, spoke to TSJ about his group’s metamorphosis, its fast growth and future plans.

You have been a successful liner agent in India. But you have also won a market share in many related areas. What are the driving forces behind this transformation?

Transworld is a growth-oriented company, and always looks for growth areas. We represent five lines in India – United Arab Shipping, Malaysia International Shipping Company (MISC), CMA CGM (we handle operations in the east and south), Messina and Dongnama, through our different group companies.

Shipping knows no boundaries. The shipping directory doesn’t have the word – `invasion’. Anyone can operate in any market. If foreign lines are increasing their presence in India, we, Indian companies, must go to their markets, and establish our presence there. Transworld, for instance, has commenced operations in the Far East and the Middle East, and our foreign offices are manned by Indians, unless it is mandatory to appoint locals. We operate from Malaysia, Singapore and Dubai, and have proved successful.

The liner agents in India are increasingly being taken over by their respective foreign principals. What, according to you, are the reasons for the new trend in liner shipping? How does it help them?

Foreign shipping lines are spreading their wings, and that is a global trend. They open their own offices in major markets, and run operations by a team headed by their own representative. That is absolutely fair, and nobody can blame them. The lines find it more comfortable, and feel that they might be able to manage it better. Also, it is a sort of integration of their operations. Cost-wise, foreign lines may end up spending more, but for them, cost is not the only factor. They look for quality services, and building brands.

Many lines think that liner agents may not be in a position to make capital expenditure in order to provide the best quality services, like how they do themselves. Now many big shipping companies have started their business process outsourcing operations and IT services in India. This may not be feasible if you operate through an independent liner agent.

Is the fast growth in Indian market a trigger? Most shipping lines think India is one of the fastest growing markets, and has a great potential?

It is true. The market is looking very bright, and has excellent growth potential. In my opinion, container volumes would double in 3-4 years. Today, you have almost every shipping line operating out of India, most of them operating through their own offices and some through liner agents. The potential of Indian market has been a big attraction for many of them.

However, it’s long journey for India. While Jakarta Port, for instance, handles around five million boxes, all Indian ports together handle just three million containers.

How do you see the trends in transshipment from India? Is Nhava Sheva being able to compete with Colombo and Dubai, two hub ports in the region?

There is obviously reduction in number of containers being transshipped to Colombo and Dubai. Once we can attract bigger mainline vessels to Nhava Sheva, India can save a lot of foreign exchange. But customs will have to pull up themselves, and provide better service. And the government should support the port infrastructure, while ports should bring down their tariffs to support the growth in transshipment cargo.