Shipping exchange is a shipping freight e-booking platform. The site can be accessed on both ios and android mobiles. It is available on the respective app stores. Most major shipping lines have already signed up and published their rates and freight propositions on the site. Exporters/importers can discover, compare and book containers based on the information provided.
Shipping logistics is intimately linked to the global economy. The international growth engines of the world have been depressed since 2008. China has slowed down from 10 percent GDP growth to 6.5 percent, the US has recovered but is still showing anemic growth of around 2 percent, and Europe and Japan continue to stagnate.
The price of commodities like oil, iron ore, copper, etc., have plummeted in the wake of slow demand. Commodity-exporting nations like Russia, Brazil, Canada, Australia, and others face huge headwinds. India, though, is one of the few large world economies that continue to show rapid growth. But here, too, corporate balance sheets are stressed, there is overcapacity, exports are depressed, and imports are down.
Global freight volumes have dropped substantially. The shipping industry is suffering from overcapacity. Freight prices are depressed, and margins have declined. Competition has increased and has become aggressive. The industry is seeking to reduce costs. The pressure is to hold on to market share.
Shipping is largely a traditional industry. It is dominated by freight booking agents who intermediate between exporters/importers and shipping lines. They take care of the paperwork and help secure an optimal freight transport deal for their clients. Most documentation, even today, is done in paper format. Online booking and documentation facility is available on sites of larger shipping lines like Maersk, but this is more an exception than a norm.
The shipping exchange platform leads to the disintermediation of intermediaries, the freight forwarders. It will help cut freight costs with savings from removing intermediation charges. This reduction is welcomed by both exporters/importers and shipping lines.
Shipping exchange is setting the stage for change in the shipping industry. The traditional shipping logistics industry and its ecosystem are poised for a makeover.
It is no wonder that since the launch of the shipping exchange website in April 2015, over six thousand exporters and importers, 1000 plus freight forwarders (freight agents), have already signed up on the exchange. The freight forwarders are smart. They see the writing on the wall. They are adapting to the impending change by joining the bandwagon.
Ashutosh Shrivastava, Founder, and CEO of the startup shared these figures with me. “Every day, we have more people signing up on the exchange,” he said. There are two co-Founders in this startup. Ashutosh is an ex-SAP sales professional with over ten years of experience. Harmeet Kohli, the other co-founder, had spent over fifteen years in big shipping lines like Maersk and others before joining Ashutosh in this venture.
The exchange will charge a small $5 commission against each container booked. The commission is payable by the shipping line to the exchange.
The sales focus of the startup currently, and expectedly, because of the location of the startup, is India. Most sign-ups are from India. Ocean freight, though, is an international business. Ashutosh intends to expand his sights soon and target the Chinese and US markets.
The trigger for change sweeping the shipping industry is low trade volume, overcapacity and cost reduction, and productivity enhancement. We know that downturns do not last forever. It becomes, therefore, critical for Ashutosh and his team to push for early adoption of the e-service by the industry.
Marketing alone, in my mind, would not be enough to achieve this goal. New functionality and facilities for shipping lines, exporters/ importers, and other stakeholders will have to be added. This will call for intensive research to identify appropriate functionality that can be incorporated into the existing platform.
E-marketplaces survive and flourish if the market and the customer ecosystem find the program easy to operate and adapt. A technology up-gradation and implementation plan should be conceptualized and put in place. To do this, funds will be required. Ashutosh told me that he was scouting for investment.
Unlike Silicon Valley, India-based venture funding institutions look for clearly defined plans. They want to look at project plans with reasonable cost and revenue projections. The plan should include timelines, milestones, investment plans, and risk and sensitivity analyses.
The world is awash with funds. Good projects number are small. Funders like to bet on ventures that have the potential of becoming unicorns, giving exponential returns. They want to be convinced of the Founder’s vision and willingness to invest time and induct quality human resources. They look for controlled aggression and maturity in the entrepreneur.
The shipping exchange idea is great, and the timing, too, looks right. But as we have repeatedly seen, thoughts alone are not enough for a startup or venture to succeed. Implementation capability is critical. For that, selling is needed to attract top-quality marketing and technology expertise into the startup. Talent should be enthused to join the venture.
A venture needs both a great leader and a great team. The team needs freedom to innovate and operate. Shipping exchange has the potential to turn into a unicorn. Ashutosh’s task is set. He is sitting on a great idea, crying to be planned well and executed efficiently. The going will not be easy. There is no silver bullet to success. It will be hard to achieve, but success is within sight.