High standards

Rising price competition means that the quality of freight forwarding overall can go down. Vikas Khan, CEO of Emirates Shipping Line, is putting the focus back on quality.

What are the company values of Emirates Shipping Line?

Emirates Shipping Line is about people. There is no real difference between the ships that all companies use; the difference in service comes from the people. We set up the company from the bottom by locating the team before buying the ships. We could have bought the fleet, and then hired two headhunters to employ the staff.

That is the top-down approach. The direction that the company has taken is to develop into a small, personalised outfit that has a close relationship with the customer by recognising that the client exists and is not just a number on the bill of lading. Through this approach, we ensure that members of our team are always going to be accessible to the client.

What are the challenges that are currently affecting the industry?

Clients want both the lowest price and the best service possible - a combination that is difficult to achieve. Freight rates have been pushed down to the point where customers are not getting the service they require.

Today, more than 60% of ships are off schedule and it's getting worse. Is that the quality that customers want?

Although service has an impact on your bottom line, you cannot focus on your bottom line so single-mindedly that you lose the aspect of good service. The service quality looks better because of improvements in the hardware but in reality it has dropped.

How has the company navigated around these challenges?

At Emirates Shipping, our goal is to reach a position where we are recognised and singled out for the service we provide. Our brand should therefore be linked to quality and we believe it is pointless to aim for size at the expense of service. We target those customers whom we think have a concern for quality of service, but we don't tell our clients that they have to adjust requirements to fit our processes.

We explain our basic processes, and then tailor them to the client. It has taken just two years for for our system to reach the level of our competitors, and in the next two years, we will try to introduce those solutions that other companies in our industry aren't able to provide.

What outlook do you see for the industry as a whole?

Logistics has been a new game in the last five years but it has not developed as much as it should. Some logistics providers, whether shipping lines or 3PLs, are now explaining to their customers that because they have sacrificed so much on price, the importance of the service aspect is bound to suffer.

The business environment has changed so dramatically over the past 10 years that we forget that it is going to change just as dramatically in the next 10 years. Some 50 years ago, no one would have predicted China's transformation into the economic power that it is today. But looking back, the signs were definitely there.

What are the prospects for Africa?

The political environment in Africa is vastly different to what it was three years ago. There is no infrastructure but there is a stress being placed by the current leadership in the continent on infrastructural development. There will also be continuing growth in the Mediterranean, Russia, India and the Middle East.

This will, to a large extent, dampen the negative effects of what has been happening in Europe and America, and this is a position that we want to take advantage of. Our primary focus right now is on the Indian subcontinent, plus the Far East and East Africa, as developing markets in the coming years.

How has government intervention helped the industry?

Dubai has not underestimated the growth of business as much as others in the Middle East have. Muscat wanted a shipping line to sign a long-term contract before the authorities there would invest in dredging the port. No shipping line signed a contract, and at least 22 years have now passed. Dubai, on the other hand, provided the infrastructure, with the expectation that business would come.

It takes a lot of courage for the decision maker to invest millions of dollars in a particular project with not a semblance of a guarantee that the business would come. The potential here is huge and, to quote James Broughton, "the only limits are, as always, those of vision".

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