“If there is an opportunistic play, that was one of a kind, then definitely (we are open to acquire),” Shetty told ET in an interview.
“What Allcargo has today is market leadership at every point of the value chain: Exim (export import), container freight stations, warehousing, 3PL (third-party logistics) and now the trucking segment,” he said. “So, any startup in the country that is operating in the supply chain segment is either core or adjacent to us. And in order for us to really be a company of the future, we need to collaborate with startups.”
The company’s business accelerator has started to work with four startups on various aspects of digitisation and will work with four more shortly, he said, without sharing the names of these startups.
Shetty, son of Allcargo’s owner Shashi Kiran Shetty, joined the company as a management intern in 2016 and then moved to ECU Worldwide, Allcargo’s overseas subsidiary and biggest moneyspinner. Even before that, as a 13-year old, he would attend meetings at ECU in Europe.
Later, he came back to India to join Allcargo’s real estate warehousing business, which it recently sold to Blackstone.
Discover the stories of your interest
“That was very interesting, because I’d been abroad for 10 years for school and then college,” he said. “And as part of this team, I got a sense of the whole spectrum. From the tehsildar level for paperwork to the offices of investment banks for meetings, it was very interesting.”
Shetty said the company had acquired several land parcels to build inland container depots (ICDs). “ICD was no longer a viable business case. So, what happened was that was kind of left alone for five years,” he added
In those five years, Shetty was part of the team that tied up contracts with customers ranging from Amazon to Decathlon. The team would also make presentations to various consultants, including real estate services company JLL, to get a valuation of the business.
Later, he took charge of digitising Allcargo. His father handed him the task with a one-line brief: “We have tried and failed in this (digitisation). So, now you have to do it!”
Shetty’s work now spans various platforms, including data science, customer applications, automation and the startup ecosystem.
At ECU Worldwide, he and his team built country-agnostic solutions that would work for all its global markets top down.
Shetty said ECU’s digital offering, which has door-to-door serviceability across countries, is one of the top three in the world. “What we really brought to India was all the peripherals that came out as a result of ECU, which is the data science, the automation and the startup collaborative,” he said.
Allcargo specialises in less-than container load (LCL) cargo and, Shetty said, that is more difficult to digitise.
“To become a digital full container load (FCL) company is very easy. And the reason for that is FCL is your reselling business, in the sense that to start a digital freight forwarding company, what you need is one customer and you acquire one container,” he said. “For LCL, you need to fill your box by at least 75% to break even,.” he explained. “There are 40 different customers. And your cargo is not filled only from the origin, but also the destination. So, you need to have the infrastructure in place. You need to have proper sales, you need proper operations, customs…everything in both locations. So, to form an LCL digital company is very difficult,” he said.
“If you’re able to digitise that, if you’re able to automate a significant amount, if you’re able to drive go-to-market in a in a digital way, if you’re able to use a lot of advanced analytics to make decisionmaking internally a lot quicker, and give that visibility to customers a lot better, what you will have is truly, truly unique,” Shetty added.
