It costs freight forwarders no less than $500 million a year to find and manage ever-changing ocean carrier rates.

That was the key finding of research undertaken by Drewry Supply Chain Advisors on behalf of CargoSphere, the cloud-based freight rate management platform.

The $500 million expense represents costs incurred by only one ocean shipping business segment, freight forwarders. It does not include the inefficiencies and costs incurred by the rate originators, ocean carriers, or shippers. It also does not include the cost of system investments to support or reduce labor costs.

CargoSphere commissioned this research to quantify the inefficiencies they have been working to ease for more than ten years.

After defining the size and makeup of the global freight forwarder industry, Drewry conducted primary research with a sampling of small, medium and large freight forwarders. Drewry determined the time and effort to receive and process rate sheets, determine global tariffs, and create a way to compare carrier options and look-up rates.

It was determined that the global freight forwarder industry annually spends 24.4 million hours doing buy-rate management including inputting rate data into their company’s internal systems.  This time and effort adds up to an overall annual cost of $500 million to the global freight forwarder community.

CargoSphere’s SUDS, eSUDS, and the Rate Mesh solutions tackle this serious industry problem to eliminate cost and a colossal operational burden. These solutions also accelerate the movement of real-time rates from carriers to forwarders so they can more rapidly quote and service their shipper customers and thereby strengthen relationships.

“The cost burden of global ocean freight rate processing is a huge weight on the industry as a whole, one that is not sustainable for global freight forwarders, carriers, or shippers” said Neil Barni, president of CargoSphere.  “This exorbitant cost underscores the need to focus on digitizing all aspects of rate management, networking and distribution, as it is an extremely important business enabler for global ocean shipping.”