Tarun Kalra’s journey—from law to shipping and journalism—shapes his unique perspective on global trade. As MSC’s Regional Senior VP, he drives innovation and leadership in maritime logistics. Discover his insights on navigating the evolving shipping landscape in this exclusive story.
Global trade faces geopolitical disruption; technology and adaptability are vital for resilience
Tarun Kalra’s career trajectory defies convention. With a background in law, a stint in the newspaper industry in New York, and a successful leadership role in shipping, his journey embodies the power of adaptability. Reflecting on this diverse experience, he states, “Experience in different industries, functions, and business cultures helps in understanding the underlying essence of mercantile activity. It provides a broad perspective, allowing one to analyse interdependencies within global trade.” His tenure in the shipping industry has been marked by an acute understanding of the intricate connections that drive global commerce, making him a formidable force in project management and leadership.
Driving innovation
MSC’s commitment to innovation was recognised with the Smart Liner award in 2019. Kalra highlights a key initiative that contributed to this achievement: “Conceptualising the doorstep delivery/pickup of cargo under one window as well as customising the solution in line with customer needs and requirements was a key initiative that helped us win the Smart Liner Award in 2019.” This project streamlined cargo movement and demonstrated MSC’s dedication to providing tailored solutions.
Dynamics of North India’s logistics
As the Regional Senior Vice President—North India at MSC Agency (India) Pvt. Ltd., Kalra oversees operations in a region that presents both immense opportunities and significant logistical challenges. North India, rich in natural resources and an entrepreneurial spirit, has been a crucial hub for trade. Kalra emphasises, “We have pioneered stepping into every new ICD that emerged in North India to serve industrial clusters. The region has grown to accommodate nearly 20 cargo aggregation points, including ICDs, CFSs, and CRTs.” Despite this progress, infrastructural gaps in manpower availability, road transport, and container maintenance remain areas that require persistent effort.
India’s maritime sector is poised for growth, driven by innovation and strategic development
A legal mind in maritime trade
Kalra’s legal background provides a strong foundation for navigating the complexities of international trade regulations. “To design optimal business processes a deeper understanding of laws and principles of regulatory framework is required,” he states. He is keenly aware of the challenges posed by conflicting regulations. “Many a time, laws and regulations applicable at different junctures are in conflict with each other,” he observes. Kalra has actively engaged with government bodies and commerce chambers to address these issues. “With the intent to simplify the applicability of laws, we have been lobbying with government bodies and other commerce chambers to tackle the conflicts.”
Having a legal mindset enables him to anticipate industry shifts and preemptively navigate regulatory hurdles, reinforcing MSC’s position as an agile and resilient player in global trade.
Geopolitical tensions: A shifting landscape
Kalra identifies geopolitical tensions as a critical issue affecting global trade. “This is the most relevant topic that merits detailed assessment since it is an imminent threat for everyone involved in global trade,” he emphasises. He notes the shift from traditional military conflicts to trade wars and political hostilities. “Until now, the triggers were limited to military conflicts, but now we see trade wars and mild political hostilities between nations, disturbing the equilibrium or the steady trade growth that had become the norm.”
He expresses concern about the erosion of the World Trade Organisation’s influence. “All the good work done by WTO in the past three decades seems to be getting undone,” he states. Kalra also points to the trend of “friendshoring,” where countries prioritise trade with political allies. “Geopolitical conflicts, including trade wars and tensions between major economies like the U.S. and China, have also reshaped global trade patterns. These conflicts have led to increased trade restrictions, disrupted supply chains, and a shift towards “friend-shoring,” wherein countries prioritise trade with politically aligned partners.”
He observes that many countries, like those in the European Union, have prioritised economic development and social benefits over military spending, which has contributed to peace and prosperity. “The majority of countries and blocs, such as the European Union, concentrated on economic development and providing increased social benefits to their citizens by diverting their military budget. And ultimately, it has delivered unprecedented prosperity, stability, and peace over the last 50 years in the history of mankind.”
No amount of training can replace the value of real-world exposure and direct industry interactions
The logistics dilemma
These geopolitical uncertainties create significant challenges for logistics players. “The logistics players, particularly with heavy assets, are at crossroads over the uncertainty,” Kalra states. He highlights the difficulty vessel owners and shipping lines face in capital budgeting. “Liner shipping is a perfect example of an inelastic business,” he explains. “Neither capacity can be increased overnight nor decreased should the trade shrink, which would obviously result in underutilisation of assets and add to further burden on the logistics costs.”
Kalra provides detailed insights into several ongoing geopolitical crises and their impact on international shipping:
- The Red Sea Crisis: A maritime disruption
The recent Red Sea crisis is a stark example of how geopolitical conflict directly impacts global shipping. Attacks by Houthi rebels in the Bab-al-Mandeb Strait forced vessels to reroute via the Cape of Good Hope, reducing global shipping capacity by 9%. “The Red Sea accounts for nearly 20% of the world’s sea freight movement. Any disruption here sends shockwaves across global trade,” Kalra notes. The alternative route not only increases transit time but also leads to higher fuel consumption and surging insurance costs, ultimately burdening both shipping lines and cargo owners. The long-term consequences of such disruptions pose challenges to industry-wide contingency planning.
- The Black Sea and Persian Gulf tensions
Similar disruptions have unfolded in the Black Sea due to the Russia-Ukraine conflict, affecting crucial agricultural exports and causing food shortages. Meanwhile, hostilities involving the U.S., Israel, and Iran have escalated risks for vessels in the Persian Gulf. “Increased political conflicts inevitably lead to rising insurance costs and operational hurdles,” Kalra explains, highlighting how global crises trickle down to every aspect of maritime trade. This persistent instability underscores the need for industry players to develop robust risk mitigation strategies.
- South China Sea: The looming uncertainty
The South China Sea, a conduit for one-third of global maritime trade, remains another high-risk zone. Disputes involving China, Taiwan, Vietnam, and the Philippines create an unstable environment for shipping lines. Kalra warns, “China’s aggressive stance poses a serious risk to the free movement of trade through this region. Any escalation here would have far-reaching consequences.” Trade disruptions in this area could lead to a significant realignment of global shipping routes and further complicate logistics operations.
- U.S. trade representative’s petition and its impact
A recent petition filed with the Office of the U.S. Trade Representative proposes imposing a port call fee of $1 million per visit by Chinese shipping companies and $1.5 million per call on Chinese-built ships. This move could disrupt the operational balance of major shipping lines. Kalra underscores the severity of the situation: “Almost 50% of the world’s cargo ships are built in China. If such fees are imposed, lines will be forced to bypass smaller ports, ultimately reducing trade efficiency.” The broader concern is that such measures could set a precedent for politically driven trade policies that hinder global commerce.
Way forward
Kalra acknowledges the growing collaboration between the government and private players in the logistics sector. “It is true that there has been an increase in collaboration between the government and private players,” he confirms. However, he identifies areas for improvement. “However, there continue to exist certain challenges pertaining to the integration of various government initiatives; for instance, the PM Gatishakti Master Plan, ULIP, etc. all continue to be run behind closed doors.” He advocates for greater transparency and industry involvement in these initiatives. “For a meaningful change in the logistics ecosystem, it is necessary that these initiatives are made open to the industry, enabling efficient planning of logistics services.”
He also addresses the issue of land availability for logistics infrastructure. “Another challenge is the easy availability of land for developing logistics infrastructure, due to which large MNCs are always afraid of investing in India,” Kalra explains. He notes positive developments, such as NHLML aggregating land for private players. “It needs to be ensured that land for industrial and logistics infrastructure is provided by the government, which has now been observed across various new initiatives, such as NHLML, which has been aggregating land for private players for developing projects under various business models (PPP/O&M).”
The digital revolution
Technology is rapidly transforming global supply chains, and Kalra highlights the key innovations driving this change. “Several transactions are now carried out electronically,” he observes, “starting from rate quotation, booking, container allotment, customs approval, electronic bill of lading to electronic delivery order, smart container tracking (real-time tracking on dashboard by cargo owners), etc.”
He predicts that customer demand for cargo visibility will further accelerate the adoption of these technologies. “With passage of time, there will be an increase in demand for cargo visibility by customers in the supply chain, which will lead to further adoption of these innovative media, thereby enabling a transparent and robust supply chain.”
Kalra emphasises the increasing interconnectedness of various stakeholders in the supply chain. “A host of agencies are getting interconnected that range from shipper, consignee, customs, ICD, port, transport operator, Forwarding Agent, clearing agent, shipping lines, rail operators, etc.” He calls for greater openness and accessibility of platforms like Port Community System, Logistics Data Bank, and ULIP. “Various platforms such as Port Community System, Logistics Data Bank, ULIP, etc. should be made more open via APIs for aggregation and dissemination of information to customers, beneficial for all stakeholders in the industry.”
Sustainability
Sustainability has become a non-negotiable aspect of shipping, and MSC is leading the way in green initiatives. Kalra highlights the company’s commitment: “We have the largest order book of dual-fuel LNG vessels, aiming to cut carbon emissions significantly.” The company also implements route diversions and speed reductions to protect marine life, reflecting its broader commitment to environmental responsibility.
Advice for young professionals
Reflecting on his journey, Kalra offers wisdom for aspiring leaders: “Hard work, curiosity, and networking are crucial. No amount of training can replace the value of real-world exposure and direct industry interactions.” He emphasises that the logistics industry provides unparalleled opportunities to engage with diverse manufacturing sectors, making it an exciting field for those willing to embrace its dynamic nature.
A call for calm
Kalra advises against overreacting to these challenges. “‘Panic is very expensive, right? It’s probably more expensive than patience,’” he quotes. He emphasises the importance of remaining calm and avoiding knee-jerk reactions. “The best thing you can do for you, for your customers, for your executives, is to preach calm, not overreacting, no knee-jerk reactions.”
Looking ahead: India’s maritime future
Kalra expresses optimism about the future of the shipping sector in India. “I foresee a bright future of the shipping sector in India,” he states, envisioning India as a major transshipment hub. “With the shipping sector accommodating not just domestic or EXIM traffic needs but also India becoming one of the hubs for transhipment traffic via the development of Vizhinjam & Vadhavan Ports on the western coast of India.”
He also anticipates increased industrial growth in India, driven by initiatives like Make in India and production-linked incentives. “This, along with increased industrial production and manufacturing in India, owing to the impetus of Make in India-linked Production-Linked Incentives (PLI), will lead to increased industrial growth, which will lead to an increase in demand for domestic as well as EXIM requirements.” MSC’s strategic priorities align with this growth, focusing on expanding its logistics presence in India. “Our strategic priority in this continues to be growing our logistics presence in India via developing various new projects and services in line with customer aspirations.”(Disclaimer: Note that the viewpoints expressed herein are Tarun Kalra’s personal views and do not represent those of MSC.)
