This Mumbai-based startup is ensuring quick payment settlements and documentation for ocean shipping
If individuals spend a very long time in a particular industry, then they either get bored or begin to see strands of opportunities that they can convert to business. Liji Nowal, Vinit Shetty, Anand Raman, Kapil Patel, and Binai Thoppil worked in the shipping industry creating software that manages maritime logistics. They started a software company in 2009 called Esfera & Aster (E&A), an IT solutions company that focussed on verticals such as workforce management, RFID, and logistics. While this company produced sustainable results for them, in 2015 they founded a startup called ODeX, a platform that allows immediate payment settlement and quick documentation between ports and SMBs, which is an opportunity ignored by most technology companies because of the bureaucracy in the shipping ecosystem. Prior to ODeX and E&A, the founders had over 15 years of industry experience in the likes of Akzo Nobel, IBM, and in several shipping companies. They got together in 2008 to build software for the shipping industry, and as we speak they are becoming experts at several of its processes.
The idea behind ODeX
During their interaction with the Shipping (Ocean) Logistics industry, the five of them realised that there was a better and more efficient manner in which the business of shipping can be carried out with the help of software. They knew the system better than anyone and built a platform that could actually benefit everyone in the industry. Ocean Logistics – till ODeX arrived – involved connecting multiple stakeholders manually. For example, if an SMB is importing machines, as per the shipping industry practice for imports, the entire documentation and payment process remains manual. There are around 12 documents that have to be personally (hard copy) submitted to one of the bureaucracies in port. Most importantly, payment is mostly done via a DD or a cheque and only after these instruments are cleared, which takes at least two working days, will the container be released for transportation. Meanwhile, since the goods remain at port for at least two days – waiting for the cheque to be cleared - the SMB ends up paying ground rent charges. Thus, it takes a minimum of three days for releasing and clearing a container. “Three days is a long cycle for goods to be shipped. It is important that SMBs need a speedy way to make settlements in ports,” says Liji, Co-founder of ODeX.
Now with ODeX, the process is reduced to a single day for the SMB that wants to import the goods. The only document that the SMB has to submit - to the authorities - is the Bill of Lading, which is a receipt of the ship’s cargo given by the master of the ship to the consigner of the goods. The rest of the documents are scanned and sent to the port bureaucracy by ODeX. The most important part – the payment - is done via the payment platform built by ODeX, where a Payment Reference Number is generated immediately by the bank. With this number, the container is released immediately. “With ODeX, the entire audit trail of the documents, payments, and actions performed is available and the SMB can take possession of the goods in a day,” says Liji.
The platform integrates with most banks and connects with all shipping lines and ports.
“As of now, we are solving two main business process issues of shipping lines and each has its own model of revenue,” says Liji. The company did not want to disclose revenues because it was just about piloting with a few ports in the country.
The company charges a fee every time a payment is made by freight forwarders to Shipping Lines for Bill of Lading. ODeX has invested about Rs 6 crore to develop the platform and to bring the entire shipping ecosystem and banks together.
The competition and the users
There are not many startups in the maritime shipping industry because there are a large set of agents that have dominated the industry for time immemorial. Technology is not yet an enabler to reduce documentation in this industry. The only other startup with a similar business model is Shipping Exchange, which is a bidding ecosystem for SMBs to discover shipping prices without middlemen.
Captain Sagar Dange, Head of Western India Operations at CMA CGM Agencies India Private Limited, tells YourStory that ODeX has proved to be helpful in simplifying the entire workflow within the trade. “It ensures increase in efficiency through effective utilisation of manpower,” says Sagar. He adds that ODeX has played a vital role in improving the online transmission of e-Form13 request to the relevant stakeholders in the industry. “We have efficiently managed to handle complete Form-13 process through ODeX from all three major ports in India,” says Sagar.
The company helps customers track invoices efficiently and acquire near real-time payment confirmation. “By reducing dependency on manual process, the company has eased business for shippers,” he says. ODeX assisted Sagar’s customers in reducing time and costs involved in the export process and import clearances of containerized cargo.
Captain Vinod Nair, VP Operations at “K” Line India Pvt. Ltd, says that ODeX takes care of all the issues faced by the Shipping Lines and their customers. “The most prominent amongst them being delays at the counters of shipping lines for DO’s and Form 13s,” says Vinod. He adds that this is a new concept of collection management of documents and has facilitated both Shipping Lines and Customers in acquiring near real-time payment and information of the same.
Here are the advantages of such a system - like ODeX - to both Shipping Lines and their customers in their import cycle.
Advantages for Shipping Lines:
- There is better control and monitoring of the payments.
- The transactions are absolutely safe and secure.
- Eliminates the crowd of people in Shipping Line offices waiting for receiving delivery orders and making payment.
- Shipping Lines are able to identify each payment received against specific document and does not need confirmation from their accounts department with reference to RTGS/NEFT payments.
- The delivery orders are generated from the system and not prepared in PDF and e-mailed, which ensures security of the document and indeed the cargo.
- The CFS is able to view the DO in their system and simultaneously check whether it is correctly issued by the Shipping Line.
- No queues in the shipping line office for collection of Form 13.
- No claims from shippers - of the surveyors - having entered incorrect data in Form 13.
Advantages for importers
- Eliminates the need for the customers to send their staff to Shipping Line offices.
- Customers can easily make the payments directly to the shipping line and get immediate confirmation.
- Customers can view the DO in their office and dispatch their transporters to the CFS – eliminates the need of sending a copy of the DO to the transporter.
- Export Customers can input the details directly and accurately into the system without having to go to and depend on Surveyors at their offices.
- Brings about considerable cost and manpower saving.
- Eliminates the need for printing/faxing/sending the DO to the transporter.
ODeX has the platform that can scale up across emerging markets. Shipping by itself is a $7 trillion economy and business from documentation automation a multi-billion dollar industry. But this is early days and the company is less than a year old. However, the opportunity remains. There is scope for startups to bring about price transparency in the shipping industry. That can be done by people who have worked in the industry and can understand its complications. It is about time some of these senior employees start their own companies and solve the lack of transparency in the shipping industry.