We use cookies to provide you with a better experience. By continuing to browse the site you are agreeing to our use of cookies in accordance with our Cookie Policy.
  • ::COVID-19 COVERAGE::
  • INDUSTRY PRESS ROOM
  • ABOUT
  • CONTACT
  • MEDIA FILE
  • Create Account
  • Sign In
  • Sign Out
  • My Account
Free Newsletters
  • MAGAZINE
    • Current Issue
    • Archives
    • Digital Edition
    • Subscribe
    • Newsletters
    • Mobile Apps
  • TRANSPORTATION
  • MATERIAL HANDLING
  • TECHNOLOGY
  • LIFT TRUCKS
  • PODCAST ETC.
    • Podcast
    • Blogs
      • Analytics & Big Data
      • Best Practices
      • Dispatches
      • Empowering Your Performance Edge
      • Logistics Problem Solving
      • One-Off Sound Off
      • Public Sector Logistics
      • Two Sides of the Logistics Coin
      • Submit your blog post
    • Events
    • White Papers
    • Industry Press Room
      • Upload Your News
    • New Products
      • Upload Your Product News
    • Conference Guides
    • Conference Reports
    • Newsletters
    • Mobile Apps
  • DCV-TV
    • DCV-TV 1: News
    • DCV-TV 2: Case Studies
    • DCV-TV 3: Webcasts
    • DCV-TV 4: Viewer Contributed
    • DCV-TV 5: Solution Profiles
    • MODEX 2020
    • Upload Your Video
  • MAGAZINE
    • Current Issue
    • Archives
    • Digital Edition
    • Subscribe
    • Newsletters
    • Mobile Apps
  • TRANSPORTATION
  • MATERIAL HANDLING
  • TECHNOLOGY
  • LIFT TRUCKS
  • PODCAST ETC.
    • Podcast
    • Blogs
      • Analytics & Big Data
      • Best Practices
      • Dispatches
      • Empowering Your Performance Edge
      • Logistics Problem Solving
      • One-Off Sound Off
      • Public Sector Logistics
      • Two Sides of the Logistics Coin
      • Submit your blog post
    • Events
    • White Papers
    • Industry Press Room
      • Upload Your News
    • New Products
      • Upload Your Product News
    • Conference Guides
    • Conference Reports
    • Newsletters
    • Mobile Apps
  • DCV-TV
    • DCV-TV 1: News
    • DCV-TV 2: Case Studies
    • DCV-TV 3: Webcasts
    • DCV-TV 4: Viewer Contributed
    • DCV-TV 5: Solution Profiles
    • MODEX 2020
    • Upload Your Video
Home » Ocean forwarders take slow boat in replying to rate quotes, but does it matter?
newsworthy

Ocean forwarders take slow boat in replying to rate quotes, but does it matter?

March 20, 2017
DC Velocity Staff
No Comments

In ocean freight transport, where time is generally not of the essence because delivery windows are usually measured in weeks, is it important for a shipper or beneficial cargo owner (BCO) to receive an immediate response from their freight forwarder to a rate request?

Historically, the answer has been no. But in a world where automated processes are compressing every timetable in sight, some argue that there's no reason shippers or BCOs need to wait days to obtain spot market quotes from their forwarders. The average wait time to receive a spot quote in 2016 was 101 hours, according to Freightos, a Hong Kong-based online rate quote pOréal that called around to 20 forwarders last year posing as a large U.S. importer seeking quotes on a less-than-containerload (LCL) shipment moving door-to-door from an unspecified city in China to Chicago. That was 11 hours longer than in 2015 when a similar "mystery shopping" test was conducted, Freightos said.

The survey also found that it took, on average, 15 hours for forwarders to follow up in person on a quote request, more than double the time reported in 2015. Nine of the 20 forwarders provided a quote, while three couldn't even receive a quote request because they lacked the necessary online forms, Freightos said. Only five of the 20 have automated e-mail confirmation processes embedded in their systems, the survey found.

"For most forwarders, automation and online sales are not yet a reality," according to the company. Swiss forwarding giant Kuehne + Nagel took top honors in the Freightos survey as being the only forwarder that instantly provided a quote, even though the forwarder didn't follow up with the customer on the quote provided. Kuehne + Nagel was unavailable to comment.

When it comes to industry conversions to digitization, the ocean shipping sector may be the last piece of fruit plucked from the proverbial tree. Tracking containers, and the freight inside them, has never been considered a high priority, mainly due to nonurgent transit times and the relatively low value of seagoing cargo. Still, visibility is important to BCOs who need to configure their supply chains, and even here the industry is found wanting. At a maritime industry conference late last month, Bradley S. Jacobs, founder, chairman, and CEO of transport and logistics company XPO Logistics, Inc., took the industry to task for failing at its baseline task of providing shipment status information to its customers.

According to Freightos, companies like Seattle-based e-tailing and logistics giant Amazon.com, Inc., and Chinese counterpart Alibaba, for whom split-second communications are a way of life, are steadily moving into ocean transport and logistics. Then there are the start-ups and deep-pocketed high-tech companies looking to penetrate traditional industries like ocean shipping, as well as mid-sized ocean forwarders looking to break from the pack. As more of the industry's processes become commoditized, they will move online, giving the advantage to IT-savvy enterprises with a different view on customer service, according to Freightos.

What's more, ocean carriers today directly control about 60 percent of the freight they transport, posing another threat to the large, multinational forwarders, Freightos said.

Inna Kuznetsova, president and COO of Inttra, multicarrier web pOréal that tracks the status of ocean containers worldwide, said the core forwarding model of delivering a broad range of supply chain services is unlikely to change. She added, however, that "what we see in low-rate environments and emerging rates visibility is a higher value assigned to services as opposed to rates, a shift in selection criteria, as well as a more thoughtful approach to services by forwarders, including better use of data and technology."

In a recent e-mail, Kuznetsova took issue with Freightos' assertions that large forwarders have been slow on the IT uptake, noting that they've used technology for years to improve their services. "We may see more 'digital forwarders' leveraging IT to consolidate volume in order to negotiate rates without providing full door-to-door service," she said. "But this type of service has limited applicability especially in (an) era of e-commerce growth, and increased reliance on consolidation, shipping small batches, integration of warehousing, and last mile solutions."

Joshua Brogan, vice president, analytics for consultancy A.T. Kearney, Inc., said the need for instant quotes is less relevant in a sector where the prices on most shipping lanes are set for years. Brogan added, though, that fast quote turnarounds have more impact in a trade lane like the U.S. export market to China, where commodities like wastepaper, cotton, and scrap metal that make up most containerized traffic don't have a buyer until shortly before the ship sails. Those types of shippers, Brogan said, "deal in large volumes and generally function as market makers, quickly capitalizing on arbitrage opportunities; they want to lock in the buy, sell, and transport transactions as quickly as possible." For them, "carving a few days out of the rate quotation process is extremely advantageous" to their operations, he said.

Transportation Maritime & Ocean
KEYWORDS Alibaba Amazon.com Freightos Inttra Kearney Kuehne + Nagel
  • Related Articles

    Ocean rate outlook for 2014: Steadier, but still plenty of unknowns

    IMO urges flexibility in meeting box-weight rules, but holds fast to July 1 deadline

    UPS announces 2017 rate hikes to take effect day after Christmas

Recent Articles by DC Velocity Staff

ATA cheers court ruling upholding looser hours of service caps

Carry (or at least measure) that weight

December cargo volume up in Houston, Oakland

You must login or register in order to post a comment.

Report Abusive Comment

Most Popular Articles

  • Cold chain giant Lineage Logistics buys its own rail operator

  • For container lines and ports, what a difference a year makes

  • Outlook 2021: What’s in store for logistics supply chain?

  • A guide to Brexit for ecommerce businesses

  • Capacity challenges will continue in 2021

Now Playing on DCV-TV

Jlt procure rugged devices thumb

What it takes to procure the right rugged devices for your warehouse

DCV-TV 4: Viewer Contributed
Procuring new rugged devices for your warehouse is often a big decision and a significant investment. It needs careful planning and consideration. It involves more than ticking boxes on a spec sheet. It includes testing and getting employee buy in. And it's about finding a partner that can work with you to deploy...

FEATURED WHITE PAPERS

  • Proven Benefits: A Compendium of Slotting Optimization Success Snapshots

  • Bridging Information Gaps in Dock and Yard Operations

  • How Intelligent Sensor Solutions Turn Data Into Action

  • Order picking Solutions: Understanding Your Options

View More

Subscribe to DC Velocity Magazine

GET YOUR FREE SUBSCRIPTION
  • SUBSCRIBE
  • NEWSLETTERS
  • ADVERTISING
  • CUSTOMER CARE
  • CONTACT
  • ABOUT
  • STAFF
  • PRIVACY POLICY

Copyright ©2021. All Rights ReservedDesign, CMS, Hosting & Web Development :: ePublishing