Allcargo Logistics Ltd. wants to boost intermodal units sharing business

19/06/20180 CommentsLuis Gondelles
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Allcargo Logistics Ltd., a multimodal transports operation and logistics with headquarters in India, is emulating Uber Technologies Inc. to make it easier for their clients to book marine freights. The Indian company which reported a drop in profit in four of the past five quarters, is betting on technology to revive volumes and take on overseas rivals, like DHL Worldwide Express. The time might be right for the company as India’s logistics infrastructure improves: The nation jumped 19 positions to 35 in the World Bank’s logistics performance. Shashi Kiran Shetty, Allcargo Chairman, said in an interview that their idea is to help its customers to make it simple to conduct their business with ECU Worldwide, Allcargo’s non-vessel operating common carrier (NVOCC), from any corner of the world by implementing Uber’s aggregation model with a robust technology infrastructure. “The Uber modeling in consolidated cargo logistics is an ambitious and innovative move,” said Mathew Antony, managing partner of Mumbai-based Aditya Consulting, an advisory firm specializing in infrastructure, logistics and real estate industries. But Anthony recognized the challenge Allcargo faces given the regulatory check-points of the export-import trade, which could affect ease of transaction. Allcargo has seen its shares fall 31% this year, while profit dropped about 30% in the first three months of the year, so the time may be right for the company as India’s logistics infrastructure improves. ECU Worldwide is a traditional NVOCC, where the company does not own a ship but owns slots for cargo, a business model similar to Uber and other ride hailing companies. After Uber’s strikingly high valuation, companies are trying to build information technology infrastructure to its potential e-commerce opportunities. According to analysts, the shipping industry can learn the increased flexibility and transparency of the sharing economy inspired by Uber. “In areas where companies are importing the same raw material, their costs connected with uncertainty could be reduced significantly by sharing supply chain”, says Lasse Kristoffersen, from Torvald Klaveness. Klaveness’ case study shows significant financial benefits: Increasing shipment sizes could reduce annual freight costs ranging $100M by $10-20M, $30-60M in liquidity can be freed up from inventory and demurrage costs can be reduced by $3-4M. With information from:

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