“When we get an order from our shippers for an ocean shipment, we try to simultaneously negotiate the rate for them, but also simultaneously take care of the blanket filing with the Federal Maritime Commission,” said Robert Burdette, vice president of strategic development for Baltimore-based freight forwarder Samuel Shapiro & Co.
There’s nothing unusual about that. It’s what forwarders do, after all. But the extent to which many forwarders are “doing what they do” online today is, if not unusual, certainly what separates them from their electronically challenged peers. For Samuel Shapiro and hundreds of other medium-sized forwarders in the U.S., Asia and Europe, it includes choosing a route and rate, negotiating it electronically with a carrier, nailing it down and booking it — all through the 100 million global rate connections maintained by 10-year-old technology provider CargoSphere.
“The CargoSphere pathway allows us to do this in one fairly smooth step,” Burdette said. “The major hurdle is getting our customers to a comfort level where they understand that this is indeed a valid acceptance of a rate and a valid rate-filing.”
That some shippers are slow to adopt the growing number of e-commerce tools available online illustrates the retro mindset of a global container shipping industry mired in costly paperwork habits. “To unplug from Excel, e-mail and fax takes time, but we are slowly but surely building momentum with our customers,” Burdette said. CargoSphere makes it easy for a forwarder to find a carrier and schedule on the route it needs through a series of dropdown menus. Once a forwarder has found the route, it can review the rate offered and submit a lower bid online, which the carrier can match or reject by automatically comparing it with the rate parameters it has set.
Once the two sides agree on a rate, the forwarder can book the shipment online through CargoSphere’s alliance with INTTRA, which provides electronic booking services to the container industry. INTTRA started providing CargoSphere’s services over its portal last year in an alliance that brought the booking, rate negotiation and contract management services of the two companies together in an integrated online process.
CargoSphere maintains a network of rates it obtains from the hundreds of global forwarders, neutral non-vessel-operating common carriers that wholesale rates to other NVOs, shipping associations and agents. “We help warehouse these rates and push them out to their individual recipients,” CargoSphere President Neil Barni said.
The only barrier to rapid expansion of its rate network is that the forwarders and NVOs that want to offer these rates first must enter them into the system, which requires data entry time and cost. “That’s the rub,” Barni said, “but we have some innovations and tools we are working on that can extract data from Excel and tables and load it into the system.”
CargoSphere’s next goal is to get ocean carriers into its rate network, and its alliance with INTTRA may be the vehicle. “Our clients offer rates on behalf of the carriers, so we are going to try to get the carriers to take on that work through our innovations,” Barni said. “It’s one rate that everyone looks at, which will lead to more accurate invoicing.”
CargoSphere and INTTRA are among a number of technology companies building online and cloud-based systems to accomplish what former Maersk Line CEO Eivind Kolding called his company to do: Make booking a container on Maersk Line as easy as buying a book on Amazon.com.
“It is not as simple as Amazon.com, but we have progressed, so that it is much more intuitive today than it was three years ago,” said Jesper Thomsen, vice president of Maersk Line’s commercial organization in Copenhagen, who oversees sales, customer service and marketing.
About 25 percent of Maersk’s cargo business is booked through INTTRA. Thomsen said most Maersk bookings come from repeat customers who are able to submit a booking request with only three actions: searching for previous bookings; selecting the one to be duplicated or reused; and submitting the booking request.
“(There’s) no need for input of any additional information,” Thomsen said. “The customer will be provided with the freight rate details for the booking, which should lead to improved invoice quality as well as this provides an up-front validation.”
Global shippers see electronic invoicing as a way to cut millions of dollars out of the costs of maintaining their supply chains. A recent INTTRA study of high-volume shippers and forwarders found that 81 percent of respondents want to receive their shipping invoices electronically this year. Seventy-seven percent of respondents rated “managing disputes” as their greatest invoicing challenge, with reducing the “time and cost to process invoices” as a close second at 68 percent.
INTTRA, which maintains an electronic network that manages, settles and analyzes ocean freight shipments for the 40 largest carriers and NVOs, enables ocean carriers to submit invoices to their customers electronically.
“Electronic data in invoicing, where the shipping industry lags far behind other industries, presents a new opportunity for cost savings that have been going on in other industries for years,” said Rod Agona, INTTRA’s managing director of electronic invoice presentment and payment. “It allows large freight forwarders or shippers to record what their rates are supposed to be when they book cargo through INTTRA and then compare their electronic data against the carriers’ data in order to increase the accuracy of the invoice charges.”
INTTRA, which gets a data feed on booked cargo rates from carriers, forwarders or shippers, provides a service called Automatch that compares the data at the charge levels, matches them, and then automatically files a dispute with the carrier online if the data doesn’t match. “INTTRA will automatically do the equivalent of someone typing up and submitting a dispute on our portal, except that the data discrepancies we detect through our Automatch algorithms are far more robust than most shippers would have the patience to sit and type out,” Agona said.
With Automatch, the amount of data that can be matched and the detail of the rate discrepancies enable carriers to get at the root cause of the problem and resolve the dispute more quickly than the traditional manual resolution, saving time and labor. It also improves the accuracy of the data. “Given how complex these global relationships are between shippers and carriers and freight forwarders with multiple locations and offices, typically paper invoices are getting lost, so there is a lot of resending and key entry going on, and whenever you rekey data, you cause brand new problems for both sides,” Agona said.
Maersk’s Thomsen said data quality is much greater when its customers use e-booking than manual channels, and it recommends e-booking to all its customers. “There is a benefit to Maersk Line,” he said, “but the real benefit is from the customer side as the amount of corrections that need to take place are significantly less, and the self-service element means you can interact with us when it suits the customer — and the waiting time is reduced.”