Mumbai: Regional manager of Maersk Logistics (South Asia) Lars Sorensen spoke about the impact of the slowdown and the company’s plans in India. Edited excerpts:
What has been the impact of slowdown on the logistics industry and how is it hurting your company?
It has reduced the overall demand for goods and services. Globally, the volume of cargo moved across countries has dropped and this has impacted the demand for logistics services. Maersk Logistics has globally seen its volumes getting impacted... but in some key markets like India, we have actually slightly improved our market position in comparison to previous years.
What changes do you see in your clients? Are they demanding renegotiation of rates?
We have seen that the freight rates have dropped at varying levels depending on markets and commodities.
Are you seeing a shift of cargo from air to ocean? How are you using the opportunity?
The markets for air freight and ocean freight are quite different and there are varying considerations to be examined before switching. For example, air cargo commodities are sometimes perishable (while) sea cargo can accommodate a higher transit time.
We have seen some rare cases of customers shifting their non-time critical cargo to ocean freight. However, we haven’t seen many such cases yet.
How is the slowdown treating you in India?
India’s exports and imports have been declining over the past few months, as per the data from publicly available government sources. Maersk Logistics has, however, managed to improve our overall volumes in comparison to the same period in 2008. We have done this by landing new customers and retaining our existing customers.
The logistics industry is highly fragmented in India. What are the challenges you face?
Consolidation will provide players with critical mass and encourage investment in technology, people and processes. We will see consolidation in the future and this will enable key players to offer value.