Shipping Success
    Category: Entrepreneurs By : Yessar Rosendar Read : 1665 Date : Sunday, January 18, 2015 - 07:07:01

    Ahmad Zamroni / Forbes Indonesia

    After graduating at college, Shashi Kiran Shetty, then 20, ended up in port of Mumbai working for a shipping agency. Despite no background in ships, he was fascinated. “I loved the business from day one,” Shashi, now 57, says. After four years he saw a chance to start his own business and founded a transportation company called TransIndia Freight Services. He rented some trucks and delivered cargo around the country. He ran his firm for 14 years until 1993, when the government liberalized shipping rules, allowing companies without a ship to offer cargo delivery services.

    Shashi immediately founded freight forwarder Allcargo Logistics in 1994. The company branched out to 18 offices across India in 1998. In 2006, Shashi was able to list it on the India stock exchange. Last year its total revenue from operations was $782 million for the year ended March 31, 2014, as against $638 million for the previous period, an increase of 23%. Shashi’s next goal is to get revenues for Allcargo over the $1 billion mark.

    Allcargo also has the wholly owned subsidiary ECU Line, which is currently is the world’s largest player in the LCL market and has a presence in more than 90 countries through over 200 offices covering over 4,000 ports. The term LCL stands for Less than Container Load, meaning ECU specializes in shipping cargo that fills less than one standard container, so it consolidates many smaller shipments into one larger shipment to fill the container. This consolidation saves money for shippers, so they only pay for part of a container, rather than buying an entire container that is partially empty.

    The ECU story is a point of pride for Shashi. ECU was actually started as a Belgian company, and Shashi’s company was its agent in India. However in 2001 Shashi bought a 16% stake in ECU despite his company being much smaller than ECU at the time. ECU’s Belgian owners were eager to sell the stake after they had financial problems and needed to raise some cash. Shashi also wisely took an option to buy a controlling 50% stake in three years, so he rolled up sleeves, sent in some of his best talent to ECU and turned around the business. Subsequently in 2005, Allcargo increased its stake to 34% and a year later, as the previous shareholder got deeper into financial woes, Shashi was able to fully acquire the company for a total of $43 million. “I didn’t want to be a minority shareholder, I saw that this as a business for infinity that will not run out of fashion or disappear, and it already had a global network,” Shashi says, “It was a very big move for us, from India to suddenly become a global player.”

    Currently ECU Line is expanding throughout the globe. Last year it acquired its partner in the U.S. and is seeking to branch out to high growth countries such as China and Brazil. “We are almost everywhere that matters and we want to think globally. We can scale our business from India to the world, market by market, that’s what we are thinking of for the future,” Shashi says.