IN
recent times, much of ECU Worldwide expansion has been due
to organic growth and acquisition. This has been achieved at a time when the
entire logistics sector was facing great difficulties worldwide.
During
this period, the company increased its product offerings and upgraded its IT
though innovation. While vitally important, ECU Worldwide really credits its
rise to the top to a deliberate focus on customer service.
This
is what emerges after an interview with its Asia-Pacific CEO, Uday Shetty, as
he detailed the activities and development of his recently re-branded company,
which last year moved 250,000 TEU and looks to a 14 per cent year-on-year
increase in 2016 within the Asia-Pacific Region.
ECU
Worldwide started in 1987 as ECU- LINE in Antwerp, but it was acquired in 2006
by Allcargo Logistics Ltd, India's biggest private sector logistics provider.
"It was first named in an effort to associate itself with the EU,"
said Mr Shetty.
In
May, 2016 the company rebranded as ECU Worldwide, bringing its 300+ offices in
over 160 countries under a single name. The quest is to unite it global
elements is now expressed in the slogan "Geography Simplified".
The
word "Line" was dropped in the re-branding. When conceived 30 years
ago, the term emphasized the firm's commitment to regular shipments of LCL
(less than container load) cargo, then known as "consol" for
consolidated. But then, these terms were little known at the time.
"We
have close to 190 owned offices now," said Mr Shetty. "The reason we
do not call the others as agents because they are really partners. We have been
working with them for 10 or 15 years."
This
results in corporate bonding, he said. "Culturally, and from a business
perspective they have integrated with us. We know how their business is done,
we know the people. We just change the shareholding - not the way things are
done."
Such
takeovers are part of the company's recent growth. "But acquisition is not
simply adding to our number," he said.
Starting
up one's own office challenges competitors while taking over a partner's
business is less of a threat, he said.
When
one buys out a partner, his total business, rather than that portion, which is
contracted to ECU, now accrues to the central treasury, which impacts greatly
on overall growth numbers.
"Organic
growth ranks pretty high too. We have opened our own companies. Malaysia office
was inaugurated in 2014, we expanded further in Indonesia and now we have five
offices. China too has been big on our priority list. Over the last 5 years we
opened 20 offices in Asia-Pacific,?he said.
"Our
main segment of business is LCL trade lane. Our main strength is the number of
daily connections and the number of sailings per week," he said.
"There
is a general expectation that we have a basic service once a week, and to all
destinations once a fortnight. We have a global vision and invest in that
because we know we can go in with X investment to get Y return."
In
acquisition mode, ECU Worldwide discusses the prospect with the target firm,
most often a long-time partner with whom the group is on friendly terms.
"In
most of the cases, the existing teams remain with us. The incentive for them is
that we open up the other part of the world for them to do more business
because they are part of the company."
Examples
of China and US operations came to mind. "When we acquired a company three
years ago in US, we didn't have our own presence in the USA. We were
represented by an agent."
Up
to that point ECU Worldwide's strength was in rest of the world excluding USA.
"We were just managing, and were not aggressively buoyant in other
countries."
"The
same happened in 2010 in China," he said. "We were not that
aggressive on China. We acquired a company in China and that investment opened
the market. So in the last three years, yes, the market may be going slower,
but we have grown faster than the market."
That,
Mr Shetty said, these investments ECU made in China and the US helped them to
tap the potential of these bigger markets.
"It's
just not an acquisition, but the growth and the additional volume that came
with it. And the benefit is not only for that one company. Since it's a network
company, all of the rest of the companies benefit too," he said.
He
said today's challenge was meeting customer expectations. "When you go to
the customer, they normally want one-stop solution. You have to offer air
freight, freight load, packing, distribution, first mile, last mile..."
As
for the rebranding and energising, the company's intention is to expand
services, into IPI (inland point intermodal), D2D (door-to-door) delivery, DDU
(delivered duty unpaid), DDP (delivered duty paid). These, he said, were now
accepted practices in the common market.
"It
is the same concept we have seen growing in Europe as well in trucking
services. The same thing in China as well," he said, again illustrating
ECU Worldwide's transfers of techniques acquired in one region of the world and
applied to another.
Then
there are disruptive technologies and disruptive companies to deal with.
"It is already here in a small way, but there are many more, which may not
immediately pose a threat, but will," he said.
As
to current freight rate volatility, he said: "If our suppliers are not in
a healthy financial condition, they will compromise on service and something
will go wrong, and that would affect our customers".
"It's
not just us, but the whole industry. What's good for the industry - and for us
- is that rate level should be maintained at a certain level. Fluctuation is
unavoidable. The advantage for us is that the intra-Asia rates are pretty
stable."
Source
: HKSG.