In conversation….with Stewart Adrian Schneider-Loos of 20Cube: running a sustainable business in India Jun 05, 2019

Australia India Business Council (AIBC) met with Stewart Adrian Schneider-Loos – Asia Pacific CEO of 20Cube (https://www.20cube.com/) a new age digital logistic company providing services in international freight forwarding, customs clearance,  warehousing and 3PL services to learn about the real business experiences on the ground in India. Stewart has been responsible for 20cube’s international expansion alongside his leadership team, Mahesh Niruttan (Group CEO) and S. Anand (CEO South Asia, Middle East and East Africa).

 
20Cube operates in 12 countries across 43 locations. The company has been in operations in India for over 30 years and the business continues to grow.
 

There was genuine pride in Stewart’s voice when he talked to us about the 20Cube way of operating in India.

 
Stewart stressed the importance of lifelong relationships for new businesses looking to do business in India, selecting established suppliers and spending time in India to handhold them and build long term trusted enduring relationships.


How did 20Cube’s relationship with India start?

 

Although my directors and I have dealt with India in our previous stints with other organisations, our motivation to establishing a base in India in the early 90s started when I attended a breakfast seminar in India where they were speaking about the awakening of the sleeping giant or something to that effect. India’s economy was about to take off and this really got the juices flowing. The message was clear. 
 

We needed to be there in order to take advantage of the market that was about to explode

 

This was the start of our relationships with India.
 
How did you then identify the Indian opportunity and make it a reality?
 

In the early 90s, we saw that garment manufacturing and export was starting to take off in India. There was an opportunity for us because we had clients in Australia who were importing garments, due to our connections with the sub-continent we were seen as specialists. In addition to moving goods for our clients, we assisted them with understanding the customs regulations and explaining to them the complexities of importing from India. From garments, we then extended into the other items that were being imported by our clients like homewares and handicrafts that were coming out of places like Delhi or interior satellite cities. These were small scale exporters and this required consolidation of freight to fill shipping containers. We saw this as an opportunity to start a consolidation service from the main cities in India to the major gateways in Australia.
 
Could you take us through the challenges you faced in India in those early years?
 
Now, importing out of India is not as straightforward as importing out of some other large Asian export hubs. With India, there are extra links in the Freight Forwarding chain, and so we needed to understand how it all worked because otherwise we would have sat in this corner of the world and had expectations on delivery that would not be met.

As with any new market we needed to understand a variety of things - local regulations, practical application of the regulations and the complex duty structure, following the paper trail of documentation and understanding the gaps, local business culture and how business was conducted in the absence of technology. We knew that having a local partner is critical however finding the right local partner with the same cultural fit as 20Cube was always going to be hard.

So, it took us quite a few trips back and forth to understand, for example, why there is a Customs House Agent, and why there is an Export Forwarding Agent in India when everywhere else in the world there was only one freight forwarder who did everything. So why are there two extra layers and the additional paperwork? We had to understand all of this before we could be comfortable and be able to offer a service to our clients.


Today, things are a lot better, things are a lot more streamlined in India than what it used to be and I think global exposure and technology is playing a big part in the improvement.
 

In all honesty, if one applies an Australian lens to dealing with India then every aspect of doing business in India is a challenge. We knew early on that we have to treat India as a unique market and learn how to do business in India. We could not apply our Australian experience and expertise in the Indian market. No doubt this expended a significant amount of management team’s energy and patience, however, the learnings have greatly benefitted the company and the individuals.

Despite 20Cube now having our own offices in India, we still haven’t disconnected ourselves from the original partners because we consider those partnerships to be valued lifelong relationships. We’ve continued to work with those partners, who are comfortable to work with us even though we have our own offices in India.

 

Can you tell us about how your operations in India and 20Cube’s operating model?
 

Our India operations comprise of International Freight Forwarding, Import and Export Customs clearance services, 3rd party logistics and warehousing and distribution operations. We have offices in 14 cities and a combined footprint of over 2 million square feet of warehouse space in 6 cities in India.

In addition to a robust freight forwarding, logistics and warehousing operations in India, we run a data management operation and administration office in Chennai fondly referred to as the DNA, which is manned by over 60 staff and runs 24/7. This team serves and supports our operational requirements in the various geographies. This helps our service offering to remain competitive and allows for our resources in Australia and other countries to focus more of their time on the customer and new sales.



Clearly, this operating model has brought some efficiencies and improved allocation of resources. How does your team in India interact with your team in Australia?


We see our team at the DNA in India as an extension of our offices in Australia. We believe it’s important to integrate them into the business. It’s fascinating to see that our colleagues in Chennai know our clients as well as we do. We bring staff from the DNA to Australia and other operating locations to meet our staff and our clients. This provides them with clarity, familiarity and firsthand knowledge of our client's requirements.

We also placed a huge value in technology and invested in a robust IT-based solution that today helps our team and clients in equal measure. We believe this is important to be able to run an efficient business in a competitive industry like ours.

Our senior management executives based in Australia and Singapore are committed to developing a strong mid-tier management team within the shared service centre that is engaged with the rest of the business. This is an ongoing process and will evolve as we go.


The talent market in India is very competitive. So hiring and retention is a continuous process.

 
Please share a few tips for Australian businesses looking to do business with India. Also, what tips or advice would you give to Indian companies that want to expand into Australia?

New businesses keen to do business in India should consider spending time in India understanding and learning the nuances of dealing with people and organisations in India. It is not one or two visits to India, you may have to do a dozen visits in your first year and make sure to handhold your suppliers to get them to understand what you’re after and to build that trust and relationship.

We have seen Australian companies having a preference in dealing with established suppliers until they become familiar with the local market. This approach may have its own merits as you are not re-inventing anything, you are dealing with somebody who is already supplying to the international market. Today with technology it’s not hard to find established suppliers.

 
India has no language hurdles. It is easy to conduct business in English.

 
 
This I believe is a huge advantage for investors who feel the need or comfort of spoken language. What is important is that at the end of the day to do business in India, to establish relationships with the company you are going to deal with, spend time with them and invest in the relationship.

As for Indian businesses looking at doing business in Australia, from my experience, they need to  simplify their delivery. They need to win the confidence of the buyer in Australia. Gone are the days of agents representing Indian companies in Australia. A lot of Indian companies are here in their own right and so already understand the Indian culture. So they are aware of what they have to do to deliver the goods and services needed by their customers in Australia.



Finally, I’m curious about the name 20Cube?


20Cube is 20 to the power of 3. We want to be one of the top 20 Freight Forwarders in the world between  2020 to 2029 with a return of 20 times. So that’s our goal and vision which has been built in to the name of the organisation. Many people confuse the name with a 20 foot container but that also fits nicely with the business that we are in!



This interview was undertaken by Amritha Zachariah and Madhu Nair on behalf of Australia India Business Council- Queensland Chapter. For AIBC membership enquiries please contact aibcqld@aibc.org.au

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