‘It’s all about ensuring a fair deal for all parties’

For the Nicolella brothers it’s been full steam ahead since they bought out commodity broking company Meridian Shipping some six years ago. While they have been involved in running the business for the past 20 years, since the buy-out they’ve have managed to grow their volumes ten-fold, with the company moving 3 500-5 000 containers a month to worldwide destinations. While good timing has certainly played a role, they believe that their customer-centric approach has been a big part of their success. And it’s the kind of success that comes at a price – but for Guglielmo and Yvan, taking their laptops to the beach and dealing with customer queries while opening Christmas presents is a small price to pay for the independence and fulfilment that Meridian Shipping has brought to the family. While Guglielmo had dreams of joining the navy as he watched vessels sailing in and out of Durban harbour during his early years growing up in the port city, commercial shipping was never a career ambition. He joined Meridian Shipping in 1990 with Yvan coming on board two years later – and when a full buy-out opportunity arose in 2006, they were up for the challenge and have never looked back. Acting as middlemen between traders and shipping lines, their objective is to get the best deal and service for the customer. “But we believe in partnering with the shipping line – because that’s in everyone’s best interests,” says Guglielmo. “And although we’ve often been approached to get involved in packing, warehousing and transport, we prefer to focus on what we’re good at and what we can manage.” The company initially focused on steel and asbestos exports, but it has now diversified in product and destination, serving traders of all sizes to a range of destinations. The East is its major market – with 50-60% of its volumes moving on this trade lane – but it’s not all about massive commodity shipments to China. “We’ll do a 40-foot container of biscuits to Port Louis if that’s what the trader needs.” According to Yvan, 2007 was a watershed year. “We were fortunate in that we had positioned ourselves well in the market when the boom hit in China and we were in the right place at the right time – and business has continued to escalate ever since. “We have remained focused during these years on what we do best and we believe the main benefit for the client is the customer service that we provide.” “It’s all about the family values of integrity and transparency,” says Guglielmo, “and we believe that this has a lot to do with our success in maintaining and increasing our customer base.” But it’s not plain sailing by any means. “One of the biggest challenges in South Africa is the lack of infrastructure in the country, strikes, port congestion, delays and changes at the port, the inconsistency of rail – and, depending on the buoyancy in the market – capacity and lack of equipment. Two or three years ago space was at a premium, but tougher market conditions have meant easier access to capacity. And while at times having to drive a hard bargain with the lines is part and parcel of what commodity broking is all about, it’s also about trying to ensure a fair deal for all parties, says Yvan. Freight rates are now a third of what they were in 2008 and half of what they were in 2006 – which could be an indication of the dire circumstances in which the shipping lines find themselves. And that comes back to Yvan’s earlier contention that it’s all about finding the balance between partnering with the lines while still having the clients’ best interests at heart. Ten years ago lines were happy to negotiate an annual contract – but they’re now dealing on a monthly basis or even a spot basis – which makes it difficult for the trader to plan ahead. “Even getting a rate for three months is difficult and hardly ever achieved these days,” he said. Competition in the field of commodity broking has also escalated dramatically over the past decade. “Ten years ago commodity broking was limited to two or three companies – there are now 20-30 vying for the same business,” says Guglielmo. Clearly the shipping landscape has changed dramatically, but for the Nicolella brothers the basics of a successful business will never change – hard work, know-how, obsessive attention to customer service – and, of course, integrity.