Shreyas shipping and logistics

Past strategies of the company:

• On Febuary 15 2006, shreyas shipping signed a
Memorandum of Agreement (MOA) for purchase of
fully cellular ship at a cost of Rs. 60 crore, in a bid to
augment its fleet strength.
• Shreyas shipping ventures into logistics in 2007:
Shreyas is the only shipping company in India that
caught the fancy of logistics space. It changed its
name from shreyas shipping to shreyas shipping
and logistics and formed a wholly owned
subsidiary for logistics.
 The logistics sector holds huge potential in the
context of containerisation of cargoes growing
around 30 to 35 per cent in India.
• It offered a door –to- door solution where the
client is assured of safety, reliability, speed and
economy, and multiple handling of cargo is
avoided leading to zero pilferage, damage and
loss to the cargo.
 Fall out of strategies
Venturing into logistics failed to gather more of
shipping:
Reasons:
a. Land logistics offered better margin
compared to shipping.
b. When revenues from logistics grew by 127.62
per cent in FY07 to the total revenues of
Shreyas, shipping posted a negative growth of
17.17 per cent.
c. Profit from logistics witnessed 75.96 per
cent growth while shipping posted 41.32 per
cent growth.
d. If the shift from shipping into logistics was
not made, the profit before tax (PBT) for
Shreyas Shipping would be only Rs. 23.80
crore when the present PBT was Rs. 30 crore.
STRATEGIES???
(DID THEY WORK, DID THEY NOT?)
• The strategy of venturing into logistics worked as
the company was diversified and insulated from
the vagaries of the shipping market.
• Though shreyas earned greater revenues from
logistics as compared to shipping, in the year 2008,
the company re-balanced its revenue streams with
income from logistics which accounted for 75% of
the total operating income (as against 63.90%) and
the balance 25% was accounted for by shipping
operations (as against 36.10%).
• The shipping business is a strong companion
to the logistics activity which filled up the gap
in the supply chain and improvised it. The
company thereby embarked on crafting tailor
made logistics and transportation solutions
and handling distribution packages for
volumes moving from one part of India to
another and also to neighbouring countries in
the SAARC region.
• Shreyas used its accumulated experience in
operating feeder services to pioneer coastal
transhipment services within India thereby
connecting Indian ports to each other for the
purposes of relaying containerized cargo. This
service provided crucial links between Indian
ports and assisted transhipment of cargo over
Indian ports.
 OUR UNDERSTANDING
It was a correct decision for shreyas to purchase
more in order to increase its fleet strength and
also to venture into logistics because by doing
so, the company improved the supply chain by
providing for tailor made logistics and
transportation solutions and thereby providing
the customers with door to door delivery and a
more safe, reliable, speed and well delivered
cargos.
CURRENT SCENARIO AND PRESENT STRATEGIES
ADOPTED BY SHREYAS:
Shreyas has through the following M $ A, joint ventures
strategized and diversified itself.
1. Entry into the bulk coastal shipping.
Shreyas shipping and logistics has deployed M V Unity,
Indian flag coastal bulk vessel, as part of strategy to foray
into the coastal bulk shipping operations. M V Unity is
single decker, self-geared, bulk ship strengthened for
heavy cargo. By this move it has positioned itself as an
integrated multi-modal logistics service provider. Also
emphasises to improve coastal shipping in India.
The company have diversified into domestic
logistics in order to de-risk its business from
volatile international freight and charter rates.

2.Shreyas have set up five warehouses and has

more than 4,000 containers which are used for
domestic multi-modal transportation.
3. Shreyas Shipping & Logistics signs MoU with
Tata Motors:
Shreyas Shipping & Logistics, a provider of
multi-modal, integrated logistics & shipping
solutions, through its wholly owned subsidiary
Shreyas Relay Systems (SRS), has signed a
Memorandum of Understanding (MoU) with
Tata Motors, for acquisition of 50 trailers
and plans to invest INR170m at regular
intervals.
 
The trailers to be acquired by Tata Motors are
new age vehicles with cutting-edge
technologies. The fleets of trailers have GPS
connectivity, providing real time information to
the clients about cargo, container and other
key aspects.
The company has also received an agreement
for a warehouse and domestic cargo
distribution center at Tuticorin and plans to set
up the same at Mundra and Cochin.
 
This is in line with the long term vision of being
the most reliable, integrated logistics solutions
provider in the country.
Future Plans
Shreyas is always looking for new areas of
business and is now looking at Greenfield
ventures in the areas of Mid-size parcel and
domestic logistics  as it intends to offer better
Logistics solutions to its customers and thus to
offer International Liner Services, Mid-size
parcel and Domestic Logistics Services.