The latest solution sees CargoSphere, United Arab Shipping Company and SEKO Logistics implementing a system designed to accelerate the distribution of current, and frequently changing, Asia-Europe freight rates that are weighing down the global container shipping supply chain.
Carriers cannot distribute bottom-line rates comprised of numerous surcharges fast enough and logistics service providers struggle to effectively manage rate updates.
In this environment, everyone loses out, CargoSphere said in a statement. Carriers lose business due to pricing distribution delays and logistics providers are forced to manage non-stop freight rate updates, which is time consuming and costly.
“We are eliminating many steps in distributing rate updates, which is enabling us to more quickly make rates visible to our customers, which benefits our customers as well as working to our advantage,” said Eric Williams, vice president and global head of sales and marketing at UASC.
The carrier’s plan is to increase the value it offers customers by electronically distributing rate pricing to customers in real-time, directly into their rate database, so rates are ready to use immediately, and CargoSphere is offering this capability with a suite of solutions.
Neil Barni, president of CargoSphere, said their cloud-based rate system was an accurate and efficient way for the industry to distribute frequent pricing updates to customers, saving time and effort.
“UASC is eradicating static file contracts, rate sheets and cumbersome management of amendments forever,” he said.
Record-low container freight rates on Asia-Europe and Asia-Mediterranean trades are encouraging shippers to place greater percentages of the cargo on the spot market, but this is making forwarders' lives difficult.
A forwarder with offices in Hong Kong and Shanghai told JOC.com that keeping the freight rates updated had forced him to hire people whose sole duty was to input changing prices on the trades. "You won't believe the time and effort it takes to ensure my prices are competitive, and it is very frustrating," he said.
Jose Quesada, vice president of ocean services at SEKO Logistics, said being able to act faster on rate information improved competitiveness. “Receiving accurate, current ocean rates in our database allows us to act on them faster and with more confidence. This is what results in greater customer satisfaction and increases our competitive position in the marketplace at a lower cost,” he said.
Zvi Schreiber, CEO of Freightos, a logistics startup handling international freight, said the volatility was making freight pricing chaotic. “Some air and ocean rates can change multiple times a day, while few logistics providers can automate their data management,” he said.
Schreiber said on a weekly basis, Freightos processed hundreds of rates with millions of new price points, an area that forwarders had highlighted as just one key area that could help them reduce costs and improve performance.
“This isn’t limited to rate management; 86 percent of logistics providers have identified technology as the number one way to deal with the changing world of freight as it moves online,” he said.
Freightos recently released a 2016 survey of logistics executives that focused on the industry's evolution for the next five years and preparations for the future. Among its findings was that almost 90 percent of forwarders believe technology will secure their future.
While the industry’s complexity and opacity may have prevented technology from reaching the freight for years, there has been a recent surge in technological innovation and adoption, the report noted. With carrier-forwarder relationships frequently functioning as a bottleneck for otherwise optimized supply chains, shippers are now expecting improved visibility, pricing and routing.
