Research Signals Interest in Direct Ocean Carrier Rates Feed
CargoSphere, the provider of a global container freight rate technology platform, has published the results of original research that was developed to determine what value the global NVOCC and freight forwarding community puts on receiving a direct, web-based feed of their negotiated rates from their ocean carriers.
In 2016, CargoSphere commissioned Drewry to define the cost burden to the global freight forwarding community to find or receive and process/analyze ocean freight buy rates. It was determined the annual labor cost is $500 million. The financial strain of processing frequently changing ocean carrier rates signaled the need for an efficient digital framework for container shipping rate management and distribution.
The CargoSphere survey investigated the various reasons and benefits for automating rate management and distribution and streamlining this process with a direct ocean carrier feed. The survey was sent out in late June 2017 to logistics providers in the ocean-container shipping industry in 13 countries, representing over 6.5 million annual TEU of container volume, in all major shipping areas of the world. Survey participants were primarily freight forwarders and/or NVOCCs of all sizes.
The most important conclusion of the survey is that there is near-universal interest from the respondents in the electronic receipt of confidential negotiated ocean carrier rates. The survey provides great confidence in this conclusion because of user responses to two different questions.
A response of yes from 92 percent of the respondents when asked “Would a direct data feed from your carriers with your confidential ocean pricing be a competitive service advantage?” When asked to rank the value to their company of streamlining the ocean pricing process on a scale of one to 10, 25 percent of respondents selected 10 (invaluable) and 92 percent selected 5 (moderate) or higher.
Carriers can be confident that forwarders will be eager recipients of this data when they are able to improve their distribution technologies.
The benefits that a majority of the responding forwarders expect from this new technology fall into two buckets: efficiency-related and sales and profitability-related.
Efficiency-related benefits included time savings for sales and operations staff, increased data accuracy of buy rates, global offices having access to accurate timely rates, and faster reconciliation of carrier invoices.
Sales and profitability benefits included faster quoting to customers, increase in customer satisfaction, more frequent selection of optimal booking carrier, , and the ability to share rates in real-time with agent partners.