BY ABIGAIL CHONG, COLIN LIM and AMANDA TAN

SINCE its founding in 1999, Orient Express Lines (Singapore) Pte Ltd has come a long way towards establishing itself as a reputable container feeder service provider. Under the leadership of 41-year-old Mahesh Sivaswamy, founder and managing director of OEL (Singapore), the container feeder service provider has grown from its initial handling of 148 twenty-foot equivalent units (TEUs) in August 1999 to delivering about 17,000 TEUs monthly in 2008.

OEL (Singapore)'s success stems from its management's focus on establishing the Indian subcontinent-Singapore shipping route and in building long lasting customer relationships. This has helped OEL (Singapore)'s sales turnover reach $91 million for the year ended March 31, 2008.

Strong roots

OEL (Singapore) originated as the regional headquarters of parent company Transworld Group, based in Dubai. At that time, Transworld Group was already an established shipping agency house in the Indian subcontinent. The group provided logistics, ship management, feedering and ship repair services to major shipping clients like the United Arab Shipping Company (UASC), the French CMA- CGM and the Italian Ignazio Messina which were operating from Indian ports and from Karachi and Colombo.

Mr Mahesh saw huge potential in linking Singapore, the strongest hub port in the world, to the Indian subcontinent. He took on the challenge of penetrating the Singapore container feeder service market with the setting up of OEL (Singapore). By February 2000, he was launching the Straits Chittagong Service, a new feeder service between the Singapore hub port and Chittagong, Bangladesh, and a first for the Transworld Group.

Despite having 12 years of experience in managing shipping agencies and logistics for Transworld Group, Singapore posed a fresh challenge for Mr Mahesh. 'Singapore is a highly competitive market and there are 35 to 40 existing container feeder lines operating out of Singapore, some of which are very established feeder operators in Singapore and are very large in size,' says Mr Mahesh.

The company's main function is to service feeder activity between the South-east Asian ports of Singapore, Malaysia, Myanmar and Indonesia, and the ports on the Indian subcontinent as well as Chittagong in Bangladesh, Colombo, Nheva Sheva, Karachi, and the Middle East. Most recently, it commenced a direct container vessel feeder service between Kolkata Port and Yangon, Myanmar. This is a new trade line for OEL (Singapore) and serves to boost trade volumes between India and Myanmar.

In addition to feeder services, Mr Mahesh started a ship-owning business, Shreyas World Navigation Pte Ltd (SWN), in 2001. SWN now owns five container ships which are registered in Singapore and fly the Singapore flag. It also charters ships that can carry about 1,200 TEUs each. The strategy is to maintain a 50-50 dependency on ships owned versus ships chartered. This reduces the risk associated with operating fully on a chartered basis and allows OEL (Singapore) to adjust for charter price fluctuations.

When it comes to feeder service, commitment and reputation are key to building good customer relationships in the closely knit shipping industry. Mr Mahesh explains 'mother vessels would not wait if there is a minor berthing delay or when there are some issues with the authorities'. As OEL's customers are major lines such as CMA-CGM from France, all of OEL (Singapore)'s trade lines must be well managed to ensure sailing commitments are met. Otherwise, OEL (Singapore) will lose its reliability and customers can cross over to the competitors.

Even as the industry is facing a slowdown, the company is surviving largely due to the strong customer relationships. 'We have a long-standing relationship with many of our customers, and we have always worked to deliver the best service to our customers,' says Mr Mahesh.

The company and its customers are weathering the current recession together. For example, OEL (Singapore) has been able to tap on the cooperation of customers like CMA-CGM & Hanjin Shipping Ltd, who are among the top 10 shipping lines in the world, to operate joint services. This has allowed most of OEL (Singapore)'s feeder service to continue and Mr Mahesh does not need to make the painful decision to anchor vacant ships - a common and costly practice that the shipping industry adopts in bad times.

Family touch

Now an indispensable part of the Transworld Group, OEL (Singapore) hires 22 employees today, from a four-man team in 1999. 'Much of the success of OEL can be attributed directly to the great staff that we have,' says Mr Mahesh. 'Everyone in the company works as a member of the OEL family.'

While the company works on a five-day work week, it is not uncommon to find staff returning to the office on the weekends voluntarily when they have work to complete. Such dedication from the staff has formed a strong, responsible workforce which ensures OEL (Singapore) fulfils all its commitments to its customers. The staff's commitment to the company can be further exemplified by the fact that none of the staff has left the company since its incorporation, except for personal reasons such as returning to their home country.

Mr Mahesh says his staff have stuck with the company through good and bad times. The entire company was rewarded with a company vacation to India a couple of years ago when the shipping industry was doing well. Similarly, as the shipping industry is now enduring trying times, the staff have stuck together to work harder.

Going forward

OEL (Singapore) has already received its fourth consecutive Enterprise 50 Award since first winning the award in 2005. 'The E50 Award provided us with the platform in seeking for financing and gave us the added respect and recognition from our customers,' says Mr Mahesh. The securing of financing has helped in OEL (Singapore)'s highly capital intensive investments of brand new 1,030-TEU container vessels, costing US$26 million each.

While the company has achieved significant success, Mr Mahesh says there is still a lot more to be done. 'We will always be a player that offers value-added and comprehensive services on the Indian subcontinent routes; we will continue to serve our customers with dedicated commitment and diligence.'

The writers are students of the NUS Business School

This article was first published in The Business Times.