Allcargo global logistics, (AGL) managed by a team of professionals has rich industry experience. As mentioned in our previous article, AGL is one of the companies that would reap benefits of a robust growth foreseen in the logistics sector. A lot depends on the companies' ability to make most of the growth options available. The litmus test for this is SWOT analysis.
In this article we have analyzed AGL's strengths that give it an upper hand.
Presence and synergies across key verticals: In our previous article, we have explained key verticals Allcargo caters to. The company has a well diversified revenue stream considering the demand and growth potential. The company has its own CFS/ICDs in place and has outlined plans to achieve a pan India presence. The company's presence in MTO (multimodal transport operations) enables it to concentrate on high growth sectors and enhance volumes. The company's equipment hiring business also supports CFS (container freight stations) and MTO segments' operations. Considering the planned infrastructural activity, the demand for equipments is likely to increase. MTO business can leverage upon CFS services of the company. These synergies across various business segments, enables Allcargo to capture a large share of the pie.
Global reach: The company has global presence with operations spread over 59 countries covering over 5,000 destinations. Its extensive geographical reach helps it serve most of the trade lanes and operate direct lines to several places. This helps it reduce transit time and eliminate multiple handling of cargo. Clients may prefer AGL owing to its reach as it would eliminate transshipment costs for them. It is one of the leading global players in terms of LCL Consolidation. While the company has established presence at major ports in India, it is one of the few players to have requisite permissions for inter CFS movement of cargo at JNPT, one of the busiest ports. AGL's extensive reach (offices at origination and destinations) helps it exercise better operational control which results in lower cost and higher margins.
Early mover advantage: The company is one of the early entrants in the consolidation (LCL Consolidation) business. Being an early mover has helped the company gain larger share of the pie. Apart from recognizing the growth opportunities at an early stage, what has helped company gain strong foothold in this segment is its wide national presence, strong agent network and top of mind brand recall.
Scale of operation: The company is a leading player and the management's ability to foresee the growth opportunities before others has put the company on a fast track with the requisite scale of operation. Large volumes handled by the company help it to enjoy preferential freight rates with shipping lines (they own the ship and physically transport the goods from the port of origin to the port of destination). Thus, economics of scale lead to operating leverage. Additionally, its extensive reach enables it to cater to customers across geographies thereby giving further boost to volumes.
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