Q&A
The logistics of entrepreneurship
KRS Logistics was established in 2015 with ambitions to become one of the regional industry’s most successful integrated players. Logistics News ME meets COO Christian Herzog and CEO Shibu George to find out how unprecedented global events will impact on their goals
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n today’s economic climate the thought of “going it alone” isn’t one that crosses many minds but for Shibu George and Christian Herzog, it became a reality with the establishment of KRS Logistics LLC. Operating out of Dubai for less than a year, the firm is today offering diversified services to a growing client base and has ambitions to become one of the top logistics service providers by 2020 after becoming ISO certified within 44 days of the company’ inception and winning a number of contracts in quick succession. But while KRS has started strong, globally businesses are struggling to adapt under unprecedented conditions and never before seen dynamics. “People are saying the market is down and,
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in my opinion, the volume of shipments is there. But when it comes to the revenue part that has been drastically reduced, particularly in the last six to seven months,” observes KRS CEO Shibu George. “It’s because of the demand and supply, particularly the availability of ship space and what is actually available for the cargo lines. In order to fill the vessels the rates are going down day by day. For example, in China, competition is tight to reach maximum volume. As a knock on effect we are now seeing the industry operating without general rate increases (GRI). There is no peak season; not only in China, but in Europe also,” he continues. While the volume of cargo and number of shipments remains comparable, George warns
the industry is heading into unchartered waters as it weathers a climate that has operated for months on end without GRI. Adding to the woes, in January of this year the Baltic Dry Index fell to 383 points, its lowest mark. To put that in context; at its high before the 2008 recession, the mark stood at 10,000. While the decline has been staggered and far from continuous, the outcome remains. The factors have been plentiful – from a breakdown in the oil and gas industry, to the impact of political and global security issues such as those continuing to play out in the Levant and Yemen. George continues: “We hope that everything will increase in Q1 and Q2 this year. We already see a trend in the rate ratio so there is a change