Will shipping lines conquer the end-to-end International Logistics market in India ?

Anyone associated with International Logistics can correlate to the situation, where margins are reducing and competition increasing with every passing month. Not only the forwarders, but the shipping-lines are also facing the heat, which is again putting various stakeholders against each other to grab the business contracts associated with International Logistics (like warehousing, customs clearance, inland services, freight forwarding etc). 

In the last few months, various shipping lines have started targeting end-to-end Logistics services in India, so that scope of business and associated profitability increases. But, will such aggressive marketing and associated sales push will work for shipping-lines in India ? 

There are various factors that may act as a hindrance to such efforts of the shipping-lines in the short-term, unless some drastic steps are taken by them at ground level. 

1). Dependency on vendors: Presently most of the shipping-lines servicing India don’t have their own assets/resources to provide end-to-end Logistics solutions in India. They have a tie-up with various vendors to provide different sets of services associated with International Logistics. Apart from this, many shipping-lines don’t have their own offices across India, they again have to depend on an agency network. This dependency on vendors again acts as a hindrance, as shipping-line staff members are not always equipped to deal efficiently with multiple stakeholders within a culture where you don’t know the other person personally. Shipping-lines are hoping that technologies like Blockchain will help them to overcome this challenge … Will it really ? 

2). Work culture: The work culture of shipping-lines in India is completely different from the expectations of customers. Shipping-lines work based on the fix timings and their staff members are not easily approachable during workdays, whereas most of the customers expect their service providers to be just one call away. On weekends, most of the shipping lines don’t respond to queries, unless you approach someone senior. In India, we don’t have any weekend like culture, as most the companies are open 24x7 and there is nothing like Saturday-off in most Export-oriented companies. 

3). Speed and associated authority of decision making: Most of the staff members working in customer-support teams of these big shipping companies don’t have any authority to make any decision. They are there to just take care of basic queries, as per the business flow of their bookings. If anything unexpected happens, these staff members are neither empowered, nor equipped to take any decision. In most of the situations, they will ask for additional time to get back on the issues, which sometimes take days. 

4). Inconsiderate nature: Most of the shipping lines are very rigid in their approach, whenever something unexpected or wrong happens. Their staff members will always follow the rule book of their management, who are sitting miles away from the actual situation. They will never consider grey-areas, whenever something wrong happens. For them, its customer who is at fault in most of the situations, unless they are caught red-handed.   

5). Credit Facilities to Customers: Indian Exporters & Importers use the credit facilities provided by different services providers like Transporters, Customs agent, Freight-Forwarders etc, whereas not a single shipping-line works based on the credit-system. Every single penny has to be paid in the advance to the shipping-line (few exceptions are there). Interestingly, most of the top business organizations in India enjoy the credit period of 30-120 days minimum from their service providers, which again helps everyone across the supply-chain to work in close coordination with complete responsibility and associated repercussions. 

6). Unethical Business practices: There are many unethical business practices, which Exporters & Imports follow within India. Sometimes its kickbacks or sometimes it’s cash dealings, which again wouldn’t be possible for these shipping-lines to follow. Apart from this, there are various illegal practices, which companies follow to maximize their profitability. Will shipping-lines follow such practices? I have my own doubts.  

Apart from above, there are various other factors, which shipping-lines need to take care of before they can really make a dent in the Indian market towards end-to-end Logistics. 

Any feedback or further inputs are welcome !!