Franck DedenisManaging Director - India Cluster, MAERSK Group
Franck joined the Maersk Group in 1994, brings strong management experience in different functions and locations, including Denmark, Madagascar, Ivory Coast, Tunisia, Algeria, Morocco and France – prior to joining Maersk Line and Safmarine India & Sri Lanka as its Managing Director, in early 2013.
Franck holds a Bachelor’s Degree in Economics from France, a Bachelor of Arts from Long Beach California University, USA and a Master’s Degree from the International Business School in Paris.
Franck is a French national and is passionate about Rugby, Scuba Diving and Motorbikes.
ORGANIZATION STRATEGY/KEY CHALLENGES
1. What was the mandate given to you by the Board when you took over in your role?
Maersk line enables global trade. We are here to assist India growth story through cost effective and reliable shipping services. My mandate was primarily was to:
- Grow profitably with the market
- Increase our footprint both commercially and operationally
- Develop our services to customers through enhanced local differentiators
For a company to create a stronghold in any market takes years and years of commitment & evolution. We as Maersk Line have been servicing India since 1921 when the M/v Marie Maersk made the first call in an Indian port. It has been over 2 years now, and I feel privileged to be in a dynamic market like India, where we will continue to play a pivotal role in growing the economy and facilitating trade.
2. How much of that has been achieved? What were the challenges faced?
We are in line with our plans. Since beginning of 2013, when I arrived, we have started calling 4 new ports bringing up the number to 15 ports across India and Sri Lanka. We have launched 6 new services complementing our traditional ones and have increased capacities. Since, we want to be closer to our customers we have opened new sales offices and have been continually expanding our hinterland coverage for easy facilitation of trade. We have developed our services offering through what we call our “customer charter”, the “Care customers programs” and our e-solutions.
Challenges we are facing as an industry relate to lack of infrastructure development at the ports, rail, roads and connectivity to and from ports. Cabotage is also a concern as it prevents economy of scale. Lastly, the customs procedures are also not as smooth as in other countries; this impedes cargo flow.
This being said we are very hopeful. The FM’s announcement of spending on infrastructure to rise in FY16 by Rs 70,000cr will push the development of efficient roads and railways along with ports which are crucial to the growth of the country. The FM’s announcement to corporatize public ports and leveraging their large land banks is a positive step towards driving port efficiencies and increasing productivity. We see developments as well on the Customs front with the will to create e-platforms and e-documents.
3. How do you respond to the needs of changing market scenario?
India’s merchandise trade intensity, i.e. trade as a percentage of gross domestic product or GDP, is still below 30 percent. It points to a huge untapped potential. As a shipping line, we want to help creating a more trade conducive environment by making it easier for customers to take advantage for the growing trade opportunities. To do so, we are concentrating on three important factors:
Proximity: Given the nature of the business, it is important for customers to have support infrastructure closer to their business. We want to get closer to customers. This we do, first, by increasing our presence in the hinterland through new sales offices, Inland container depots and Container Freight Stations. The customers have somebody that they can go to as a professional point of contact for Maersk Line in Tier II and III cities. Instead of staying only in the Delhi, Mumbai etc., we are going deeper. We have opened up new markets in that sense. Coupled with this are the direct mainline service calls at ports closer to the business catchment areas to help customers get the speed they need to get their goods in and out and also reduce on transportation cost.
Now if you look at India, our presence encompasses 14 ports and 48 ICD’s that we operate through or from. If we look at the last two years for instance, we have developed new ports like Hazira, Krishnapatnam and Kattupalli. If we look at the far-east for instance, we have enhanced our services from the Far-East to India North West by making a vessel sharing agreement, where we pool the vessels offering them three departures per week from all the major Asian ports to North Western India. So we have opened the scope of all the direct calls.
Accessibility & Reliability: We are in the business of helping the global trade, that’s what we do. And we do that by providing reliable shipping services for the global intercontinental routes. Through Maersk Line, India gets access to its most important trade markets across the world – important both from an imports as well as an exports perspective. With Asia sourcing increasing, we will continue to focus on new services connecting India to the world. There is also an emerging trend of trade burgeoning between emerging economies, so there will be an increased focus on services on the South – South trade corridors. We have opened for instance a direct service linking India with South Africa and West Africa. This in turn will provide Indian businesses the right opportunities to develop new trade partners in countries, which are new but slowly becoming, important EXIM partners.
In addition to this we have a comprehensive E-commerce suite which allows customers to pretty much follow the entire shipping cycle, online – right from booking to tracking to payments to delivery. To support our customers we also have something called a customer charter which lays down strict parameters for service.
Local Differentiators: We realize that every market has different needs and apart from our global offerings, there are certain practices or services which are localized only for a particular market. A good example of this and that which is also a recent development, is the availability of the Import Invoice on the web. This is not only an industry first but is also a best practice in the Maersk Line world.
Typically, consignees needed to call us or email us to receive invoices for imports, now all they need to do is log on through our website with their Bill of Lading number and they can get an e-invoice. This has proved to be a lot more convenient and easy for them. In addition to this, we have also tweaked our internal processes further to ensure that they get their delivery orders within an hour and half from the time that they have made their payments. While to a layman who is used to getting notifications, this might not seem like a big innovation, for the shipping industry where typical transactions are particularly large scale and subject to monitoring, a turnaround of 1.5 hrs is an industry best practice!
4. How has the market evolved in the last few years?
Globally, we have seen three trends these past years in our industry.
- Firstly, the growth has been much less than what it was prior 2008 where we saw double digit growth. Latey the global trade growth has been around 4 % and the traditional markets such as Europe and US have been on a lower end of the growth spectrum while we have seen new markets and especially emerging ones and south/south trades as well as interregional ones developing faster.
- Secondly, because of this lower growth, there has been an oversupply scenario putting pressure on the rates. this led the shipping lines to look at controlling the costs much more. This is mainly done through optimised network, operational alliances and slows steaming.
- Thirdly, developing local differentiators and providing customers with better services become a bigger part of your value proposition which was before mainly focussing on transit-times.
As far as India is concerned
- The growth is stronger around 7 %. As Maersk Line, we consider India as a strategic market and as such are providing the customers with mainly dedicated products to/from the main markets.
- We see more and more trade between emerging markets. So there is a definite shift from purely traditional markets (South – North) to newer potential markets (South – South). For instance, there is more and more trade between Asia and India, between India and Africa and Latin America so those are trade lines we see developing and most likely continuing to drive growth in the years to come.
- We see the growth coming more and more from hinterland and as such we are developing our footprint within India by opening sales offices, ICD and CFS. We also start calling new ports being closer to the catchment areas. We are also coupling this with e-solutions enabling anybody anywhere to be always in touch with us and with his shipments.
5. What are the key challenges your organization is facing currently? And what are the steps you are taking?
In India, growth is mainly being hindered by the uneven state of development in supply chain infrastructure and systems. We would like to see India develop coastal shipping and inland waterways, and a quickened progress on the dedicated rail freight corridor and the National Highways. As it stands today:
- Freight rates for road and rail are three times higher than river or sea transport. Better infrastructure will not only help the maritime industry but also Indian businesses and consumers, because eventually the benefits do get passed down to them both in terms of convenience and a reduction in price.
- Cabotage is an issue. As long as the cargo reservation system remains in force, domestic container lines will keep freight rates high. If cabotage laws were relaxed/more operators could contribute to a substantial reduction in coastal freight rate and transcontinental shipping lines could optimise their network, gain economy of scale which would benefit Indian shippers. In view of the restrictions placed on the movement of containerized cargo along the Indian coast on foreign shipping lines, they are now compelled to make use of foreign ports, namely Colombo, Singapore, Salalah and Dubai, for transshipping India’s foreign trade at an additional cost.
- The Time taken for customs clearance has been a major cause for concern. We suggest that the improvement in the business processes going forward will help ensure smooth efficient operations at the ports. It should be using an e-platform and allow more direct delivery to consignees.
- We need ports that we can access all the time and with big vessels, because that is where the economy of scales kicks in.
- Hinterland connected ports are also the need of the hour because not all the cargo is meant to stay around the port and neither does it originate only for business catchment areas close to the main ports.
From Maersk line’s point of view, we are constantly looking at optimising our flows and have opened ICD/CFS, sales offices, new ports and new services. We are open to helping all authorities and organisations that want to work with us on this.
India is only going to become more conducive to trade and foreign investments as we see positive developments on the infrastructure front as well as Indian businesses and consumers demanding more transparency and speed in government reforms.
6. What is your talent strategy? How do you draw the balance between home grown vs lateral hiring at the leadership level?
- As a group, our business success is built on a number of strengths: our size and global reach, our financial strength, our talented employees, our values, our approach to sustainability and our drive to innovate. Combined, these strengths form a unique platform for our continued success and future growth.
- We have around 12000 Indian colleagues working in the group, be it in shipping front office, our global service centers, the terminal, the logistic arm or on board our ships. This provides of course any opportunities locally and globally for young Indian talents.
- As Maersk line, we participate actively in the Indian growth Story and are a true enabler of a more competitive and stronger India. This si also a value proposition for talents who wants to build India of tomorrow.
- At Maersk Line, we believe in maintaining a sound balance between home grown and fresh talent. Growth opportunities across business units across continents ensure that the in-house talent is retained within the group and valued for its vintage in the group.
7. How does your organization identify and develop future leaders?
- At Maersk Line India, the work culture drives employees to give their best not only because it is an expectation but also because they want to. Employees are supported by an environment which is a combination of empowerment and autonomy in decision making, conducive to high performance. Strong and deeply inculcated values are the cornerstones that drive the organization to not only be the market leader but also the trend setter.
- The Maersk group offers incredible breadth of opportunities that aid personal and professional growth. Employees are equipped with tools to make them multi skilled and help in their holistic development and transition into diverse positions. It is truly a multinational because across locations and business units we get to work with a heterogeneous mix of employees hailing from different geographies. This ensures global sensitization, exposure and respect for diversity. Maersk Line India for that matter has had colleagues from China, Nigeria, Sri Lanka, Netherlands, etc while we have indian colleagues currently working in Africa, Latin America, Middle-East, Europe and Asia.
- One can see “open-door policy” in practice at Maersk Line where bureaucracy is not encouraged; people are treated as equals and respected for their individuality rather than the job level they serve. Excellence within roles is recognized, appreciated and rewarded. Which is why, most employees feel immense pride in being associated with Maersk Line and have celebrated key milestones with the organization.
- A commitment to recruiting the best talent involves a commitment to career-long training and education. This ensures that Maersk and its employees stay ahead of the marketplace.
- Maersk Group values have helped the company earn and keep the trust and goodwill of customers and business associates across the globe. They guide the way Maersk Group employees behave and interact with others – regardless of where they are in the world.
8. What are the 3 key aspects you look at when you hire your direct reportees?
- At Maersk Line, we follow a people orientated approach, and they need to be true believer of Teamwork as we achieve always much more through close cooperation and willingness to help each other.
- They need to be confident, commercially driven and result orientated
- We look at process orientated talent who can work in a complex environment and still manage to simplify things. An understanding of complex business processes is a must.
SHORT/MEDIUM TERM OUTLOOK & STEPS TAKEN
9. How does the growth prospect of your organization look like for the next 12-24 months?
We expect the market to grow at 6% to 7 % year on year and we are geared to grow with the market by participating in segments which prove to be profitable for us.
10. Will there be any significant change in the market dynamics in next few years? If so, what steps are you taking for the same?
The objective for the company in 2015 – 16 is to grow profitably with the market and understand the importance of being in the game for the long term. We will strengthen customer loyalty by providing them with value for money. Our customers have indicated that the boom and bust cycles hurt them in the long-term and that they want a stable and reliable supply chain partner. The ability to provide proximity and accessibility, cost effective reliable Products and efficient customer friendly Processes would be the key to an accelerated growth for the company in India.
11. In a world full of Volatility, Uncertainty, Complexity & Ambiguity (VUCA), innovation has become one of the most important factor to transform a crisis into an opportunity. How do you promote Innovation?
Innovation can be about adapting the business model and figuring out better ways of doing things. This is how we try to innovate every day at Maersk Line. For us, innovation is a highly focused discipline that aims to deliver better service, protect the environment, create new business opportunities and ensure cost-effectiveness.
The rapid technological advances taking place in the world today have opened the door to new business opportunities. How we embrace these opportunities and use them to be innovative in our operations could transform our business and society.
Take for e.g., slow steaming. For us, slow steaming equals green shipping. Slow steaming has been beneficial for even the small lines. The best way to ensure sustainability is to link the drive of the green aspect to the business. For us sustainability is not only concern for the environment, for us sustainability is reduction in the Co2 emission and saving costs for our customers. We have given ourselves a target which was to reduce Co2 emission by 25% by 2017 and we have already exceeded that. Now we have put a higher mark which is to reduce to 40% by 2020. We have to reduce to almost half out Co2 emission footprint per container transported.
12. How Indian leaders can become Global Leaders?
To become a truly global leader I feel it’s essential to go beyond your own cultural perspective and learn and observe the business practices in different contexts. To be adaptive, receptive of beliefs of others and understanding your own beliefs. Having a deep insight and sensitivity towards other cultures can really help to master the global business perspective. Listen well and be humble and curious. It’s also important that as a global business leader, one must respect the identities and affiliations of others.
13. What are the 3 most pivotal moments in your career that you either learned from and/or that got you where you are today?
Each position has its own challenges and they also come at different times in your career path. Starting the activities of Maersk Line / Safmarine in Madagascar almost from scratch at the age of 29 was a challenge and big learning experience. Creating and implementing a plan to transform Maersk in France, a mature market and senior organisation, for a period of 4 years was also a challenge and learning experience. India is challenging because of its size, complexity and market dynamics.
There is something new that you discover every day, there are ups and downs…
It’s been exciting & challenging. This industry, particularly Maersk Line puts you at the centre of global trade, one of the oldest forms of exchange between civilizations then, countries now.
I have learnt for instance what it takes to be able to have litchis, a summer fruit, available in retail outlets even in winter or the coffee beans journey from the farms to the instant coffee which a lot of us are so used to having every morning. Not many people are aware of the sheer complexity of operations that makes this possible.
The insight that you get into the intricacies of the various supply chains is tremendous. The exposure that you get is enormous because newer markets continue to open up and this means that there will be newer products to export, newer consumer segments to target. Therefore, trade is only going to grow and we will ensure that our role will be to facilitate it and add to the economies we operate in.
14. What key lessons have you learnt from any mistakes, if any, made in the past? How would you do it differently?
I would not change anything. Otherwise I would not have had the experience of learning and adapting, which is very important for a leader. You must ensure that your “software” is always up to date so to speak. Experience and ability to learn new things make you better. This is the first lesson.
The second is that you cannot do anything without a strong team. Getting the right people is an obvious thing but it is very important. You thus need to invest time in it by selecting the right ones, giving authority/empowerment allowing mistakes and helping your people to move on. Be clear about the employee value proposition and creating the right environment where people feel valued. I believe in Positive Stress which comes from healthy competition and the drive to reach goals that we set for ourselves.
The third one is that you need is to spend some time on processes as that is where you can make the difference versus competition in terms of cost and services differentiation.
15. How do you define & practice leadership?
Leadership is about a) attracting the right people and developing them b) creating the right environment so they can perform fully and c) absorb uncertainties and have a clear vision and communicate clearly about it.
Leadership means the ability to embrace a ‘consult and facilitate’ style to improve the quality of communication and decision-making both within the team and across the organisation.
Leaders should have a more holistic view of the business beyond their defined roles resulting in a greater involvement of discussion all round. People are treated as equals and respected for their individuality rather than the job level they serve.
As a leader my aim is to ensure the teams are well aligned, infuse positive stress to carry out the company strategy efficiently and attract and grow talents.
16. What message would you like to share with young professionals at the start of their career?
The logistics industry has a great future. World trade is going to grow and is going to exist always – you will never get bored! The industry offers you the kind of diversity that you would never imagine unless you have actually experienced it yourself. It’s possibly the largest kind of international platform – exposure and experience wise. If you are the kind of person who constantly seeks the “new” and the “different”, this is the place for you.