Domestic Shipping Companies Could See Decline in Revenues by 5-7% Next Fiscal: CRISIL

Shippers see a further revenue dip of 5-7% next fiscal as charter rates course correct

Healthy profits and modest capex spend to support credit profiles

Domestic shipping companies could see their revenue decline 5-7% next fiscal as charter rates continue to normalise. This follows a steep fall of 23-25% this fiscal, after the 35% growth spurt in fiscal 2023 when charter rates had surged because of geopolitical conflicts (including the Russia-Ukraine war) and higher demand from China post-pandemic.

While the margin profile may vary widely across players operating in different segments, average operating margin may continue to moderate to 33-35% in the next fiscal driven mainly by the correction in charter rates. However, it will remain higher than the pre-pandemic levels of 25-30%. This along with modest capital expenditure (capex) plans, should sustain the healthy credit risk profiles of shipping companies.

Charter rates for tankers and dry bulk carriers in USD/day

A CRISIL Ratings study of five shipping companies, which account for about half of the ~20 million metric ton (MMT) deadweight tonnage (DWT)1 of shipping fleet in India, indicates as much.

Shipping fleet of domestic companies is dominated by tankers that carry crude oil and petroleum products (contributing to ~70% of total DWT), followed by dry bulk carriers carrying unpackaged commodities such as coal, iron ore and grains (~20%). The balance is distributed between container ships, gas carriers and others.

The charter rates correlate with the global demand-supply dynamics.

Anuj Sethi, Senior Director, CRISIL Ratings, said, “We are seeing charter rates for crude and product tankers correcting 20-25% this fiscal from the average of ~$50,000/day last fiscal, as global uncertainties (caused by Covid-19 followed by geopolitical conflicts) ease. Expecting the current trend in global trade continues, charter rates could further moderate next year, but will remain higher than the pre-pandemic level, supported by buoyant tonne-mile2 demand and limited new fleet deliveries.”

Charter rates for crude oil and petroleum product tankers will be supported by growing imports by China and India; also, to be aided by better fleet utilisation given higher tonne-mile demand due to change in trade routes following the Russia-Ukraine conflict. On the supply side, capacity addition for tankers is expected to remain limited given the decadal-low orderbook, which will keep charter rates much higher than the pre-pandemic level of $15,000-25,000/day.

As for dry bulk, charter rates are expected to remain range-bound this fiscal and the next, with moderate growth in demand for key commodities, especially iron ore and coal (accounting for 40-45% of the global dry-bulk trade), and moderate fleet orders. Average charter rates had declined last fiscal due to lower demand of these and other key commodities due to subdued industrial/construction activities in major economies.

These corrections seen in charter rates will also impact operating profitability of shipping companies.

Says Joanne Gonsalves, Associate Director, CRISIL Ratings, “We expect average operating margins of shipping companies to moderate 300-500 basis points to around 38-40% this fiscal and further to 33-35% in fiscal 2025 as charter rates normalise. Albeit, operating margins will continue to remain higher than pre-pandemic levels. We also expect credit profile of shipping companies to remain stable, benefited by healthy cash flows and limited debt addition as no major fleet addition is planned. This will ensure comfortable debt metrics, despite a slight moderation from fiscal 2023 levels.”

Trucking Marketplace RAAHO Raises Rs.20 Cr As An Extension to Pre-Series A Funding

With existing investors like IPV, Roots Ventures and New investors such as Blume Founders Fund , Vijay Shekhar Sharma, Kunal Shah and others

The marketplace for Inter City Trucks plans to use these funds to strengthen its Data Science and ML capabilities to further accelerate future expansion

Raaho, India’s leading Digital Freight Network, has secured funding worth INR 20 crore in extension to the Pre-Series A round at a valuation of 4X over the last year. The round was led by Inflection Point Ventures (IPV), Roots Ventures, Blume Founders Fund and prominent Angels like Vijay Shekhar Sharma , Kunal Shah, K Krishna Kumar, Venkatesh Vijayaraghavan , Aseem Khurana amongst others. The fresh capital infused will be used to increase Raaho’s geographical presence across the country and strengthen its Data Science and ML capabilities to automate Freight matching.

Imthiaz, Co-Founder & CEO, Raaho, said, “We are delighted to continue our mission of making lives better for Truckers and Drivers of India. With this fund raise , we plan to expand our reach to more geographies in India, while also strengthening our data science and machine learning capabilities to enhance our freight matching efficiency. At Raaho, we're committed to building a better tomorrow for all."

Vinay Bansal , Founder & CEO, IPV said "We are thrilled to continue our investment in Raaho, as we see enormous potential for growth in the largely untapped market of digitized trucking. The Raaho team has shown exceptional dedication in building a sustainable business model with strong fundamentals, and we are excited to be a part of their journey towards success."

Vijay Shekhar Sharma, "I've known Imthiaz for over 15 years, and I'm excited to personally invest in Raaho’s mission to enhance the well-being of truckers and drivers. As we see more industries impacted by digitisation, the potential to improve the efficiency of the trucking market is immense and I look forward to this ride with Raaho"

The Gurgaon-based company has operations across 15+ cities in India with presence in major cities like NCR, Chennai, Bengaluru, Coimbatore, Mumbai, Hyderabad, Kolkata, Pune, Ahmedabad , Kanpur, Karnal and more. With the fresh funds, the startup aims to expand their network further and build efficiency in the trucking space to reduce empty miles.

About Raaho:

Established in 2017 and founded by Imthiaz (Co-founder and CEO) along with his colleagues Muralidharan C. (Technology), Vipul Sharma (Product), Fahad (Operations) and Joshua Jebakumar (HR & Customer Experience), RAAHO is India’s most reliable and fastest growing marketplace connecting shippers and truckers nationwide. Headquartered in Gurgaon, it has marked its presence across India in 15+ cities including NCR, Chennai, Bengaluru, Coimbatore, Mumbai, Hyderabad, Kolkata, Pune, Ahmedabad , Kanpur, Karnal and more. Raaho is successfully combining tech and data science to create operational and cost efficiencies for the Indian trucking industry that is traditionally unorganised, opaque and highly complex to navigate. Raaho offers its on-demand trucking solution through its complete suite of apps (Shipper App, Trucker App, and Driver App) to offer closeby discovery, verified vehicles, credible shippers, real-time tracking of freight-loaded vehicles and instant digital payments. Asset-light and capital-efficient Raaho aims to level-up the current freight marketplace with better processes, consistency and transparency.

Kuehne+Nagel Named Best Freight Forwarder By Ministry of Commerce and Industry

Hosted by the Ministry of Commerce and Industry, Government of India, the first ever National Logistics Excellence Awards recognise the contributions of the private sector

Kuehne+Nagel won amidst 169 submissions across 12 categories from logistics companies in India

Kuehne+Nagel, the leading global logistics service provider, was named Best Freight Forwarder at India's first National Logistics Excellence Award, held in New Delhi by the Ministry of Commerce & Industry, Government of India.

The awards are intended to spotlight the change-makers driving innovation and transformation in the logistics sector in the country. The Ministry of Commerce and Industries undertook a year-long process of identifying, categorizing, and selecting qualified applications from 169 entries in 12 award categories.

Mr. Piyush Goyal, Union Minister for Commerce & Industry, Consumer Affairs, Food and Public Distribution and Textiles, presented the award while commending the logistics industry's efforts during the Covid-19 outbreak by developing resilient and efficient supply chains, overcoming the challenges of the pandemic and supporting trade growth as seen over the last two years. Kuehne+Nagel won the award amidst stiff competition from logistics companies in India.

Mr. Coen van der Maarel, Managing Director – India, Sri Lanka and Maldives at Kuehne+Nagel, comments: “We are very pleased to have won the accolade. Among the pandemic's vulnerabilities and challenges, the award is a huge recognition and encouragement for our team and a testament to all of our efforts to deliver consistent, reliable and timely services to our valued customers.”

Kuehne+Nagel provides integrated logistics solutions across sea logistics, air logistics, road logistics, and contract logistics from a team of highly experienced professionals.

About Kuehne+Nagel

With over 78,000 employees at almost 1,300 sites in over 100 countries, the Kuehne+Nagel Group is one of the world’s leading logistics providers. It operates in sea logistics, air logistics, road logistics and contract logistics, with a clear focus on integrated logistics solutions.

Freightify, The Shopify For Maritime Freight, Raises $2.5 Mn in Pre-series A Funding Led By Nordic Eye Venture Capital

Freightify, the ocean rate management platform bringing advanced e-booking functionality to freight companies of all sizes, today announced it has secured $2.5mn in Pre-Series A funding led by Nordic Eye Venture Capital with the participation of Tradeworks VC, Venture Catalysts, 9Unicorns, and Blume Founders Fund. Existing Investor Mr. Vinod Kumar Talreja also participated in the round.

Freightify features a suite of pricing and sales tools for the ocean freight industry and already serves customers in over 10 countries. The firm will use the proceeds to invest in expansion into the US and Europe. The company also plans to invest in its product ecosystem covering other stakeholders of the container supply chain.

Freightify’s platform handles more than $400mn in freight revenue for customers and a corresponding GMV of $2 billion while the SaaS model can scale as the customers grow.

“Exciting to follow a dynamic and ambitious organization that has great chances of making a huge digital impact in International freight forwarding. We encourage the global outlook and is impressed about the common vision for the company” said Nordic Eye’s Investment Manager Ib Drachmann

“We invest in ‘Digital Trade Enablers’ that drive trade through innovation, by solving important problems in Logistics and eCommerce. One of these important problems is the lack of structured commercial data that can be used across the freight forwarding value chain, from freight rate procurement, standardisation, automation & quotation, to e-bookings and visibility” said Niklas Holck, CEO at Tradeworks.vc

“We founded Freightify with the belief that the future of technology in freight forwarding should be democratised and made available for everyone.” Said Raghavendran Viswanathan, CEO and Co-founder, Freightify. “The current capital expansion from the right partners cements this belief and helps us add value to the maritime industry across the world.”

Freightify makes it simple for small and mid-size freight forwarders with little to no technology expertise to set up an online own branded storefront. This store is powered by data from various sources including live prices from ocean carriers like Maersk, CMA CGM, Evergreen, etc. At the same time, offline contract rates from other carriers are automated in real-time for easy comparison. Further, this can be easily integrated with the freight forwarders’ TMS systems for operations and fulfilment.

About Freightify:

Freightify (formerly FreightBro), enables freight forwarders of any size for the digitization of global trade. The brand empowers freight forwarders by providing white labelled rate automation solutions to digitize their rate procurement, rate management, and quotation processes with ease. Freightify is backed by marquee accelerators like the Betatron Group, JioGenNext, and Alchemist Accelerator.
For more information visit: https://www.freightify.com/about-us