Business Today

Growing Volumes

The cargo consolidator has been growing at a fast clip on the back of its innovative business model
twitter-logoPB Jayakumar | Print Edition: September 8, 2019
Growing Volumes
Abdul Khalik Chataiwala, Chairman and Managing Director, Lancer Container Lines / Photograph by Rachit Goswami

Abdul Khalik Chataiwala, Chairman and Managing Director of Lancer Container Lines, decided to start a container logistics business in 2011, after more than a decade in international trade. "I had very close connections in logistics business and hands on experience. These were key deciding factors while making the shift," says Chataiwala, who has a diploma in Export-Import Management from India International Trade Centre and an MBA in Shipping from the Adam Smith University, Saipan, USA.

Lancer Container owns and provides containers to companies for international movement of cargo and offers allied services such as shipping and freight forwarding, providing yards for storage of empty containers, inland transport service, etc. Its core operation, however, is of what is called a non-vessel operating common carrier (NVOCC), a cargo consolidator that does not own a vessel but acts as a legal carrier by accepting responsibilities of a carrier that issues its own bills of landing or airway bills.

Within eight years, the company established 12 offices across India, other than its headquarters at Belapur in Navi Mumbai. At present, Lancer has more than 8,500 containers. The large number gives the company an edge in negotiations. Moreover, there are less than 20 NVOCCs in the country with more than 5,000 own containers, says Chataiwala.

The company has a container yard at Panvel, spread over 20,000 square metres. Its average capacity utilisation is over 60 per cent and it manages over 62,000 container movements a year. Its growth in business is reflected in rise in the number of containers. At the end of 2016/17, it had 5,490 containers, which increased to 7,022 next year and 8,289 by the end of 2018/19.

The increase in business has reflected in the company's financials as well. In 2015/16, its revenue was Rs 43 crore and net profit was Rs 55 lakh. The revenue increased by over 80 per cent in just one year - to almost Rs 78 crore - and profit after tax (PAT) more than doubled to Rs 1.68 crore. The streak continued in 2017/18 (Rs 110 crore revenue and PAT of Rs 6.84 crore). By 2018/19, the revenue had increased to Rs 197 crore and PAT to Rs 8.22 crore. In the last four years, the company's revenue has increased at a smart clip of 66 per cent compounded annual growth rate (CAGR). The same figure for PAT has been an impressive 146 per cent.

In 2018, the company bought a 15,000-square feet space in Belapur, Navi Mumbai, as its corporate office. It is close to the Nhava Sheva port (Jawaharlal Nehru Port; the largest port in India), and houses over 100 employees.

Best Foot Forward

Can the company keep up this pace? Container volume in India is expected to double by 2020, thanks to new ports, dedicated freight corridors and increase in containerisation - from the current 55 per cent to 65 per cent, say industry analysts. "We plan to almost double the container numbers to 15,000 over two years, targeting growth of over 25 per cent CAGR over the next two years," says Chataiwala.

Lancer has a large customer base, mainly B2B companies, through an extended network with international logistics agencies and agreements for NVOCC container handling operations in Gulf, Upper Gulf, Far East and Indian subcontinents.

"Our success can be attributed to prompt delivery and service, pricing, availability of containers and networking," says Harish Parameswaran, Director of Finance at the company. The company is also diversifying into newer areas of related businesses. For example, it has recently started offering refrigerated containers and has bought over 100 of these. It has also introduced innovations like flexi-bag cargo carriers, which are cheaper for the customer to carry liquid cargo. Some of the other new areas of business it has entered into are loose container load services and air freight services.


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