Last week, we aired a webinar on how to cope with pricing volatility and lack of standards in the containerized freight logistics industry. The audio portion and slides of that webinar are now available for download.
The following is a snippet of the speakers’ remarks, Patrik Berglund, CEO, Xeneta and Katherine Barrios, CMO, Xeneta.
Xeneta – A Brief Introduction
Patrik started the webinar with a brief introduction of Xeneta by saying we are a cloud-based ocean freight rate platform used for benchmarking and in-depth market intelligence. Cloud-based meaning that we are software that prices contracted ocean freight rates for spot and long-term rates --- in real time and on demand. He highlighted that being cloud-based allows for this flexibility, scalability and speed. We are based in Oslo, Norway who once was and still does remain a significant player in the shipping industry. The team members we have on board at Xeneta have strong backgrounds from the logistics and technology industries and the combinations of that expertise is quite powerful in helping to further develop this platform and constantly develop added-value for our customers. He concluded the introduction by mentioning that we have a good number of companies on board our platform ranging from SMBs to large enterprises like Electrolux, Continental, DKB and Akzo Nobel, to name a few.
Patrik then moved to explaining what makes Xeneta difference is the amount of data we have. Our density grows daily where today we have over 12 million contracted rates in our platform. With this we can say that we have one of the world’s largest, if not _the_ largest database of ocean freight contracted rates. This, therefore, makes our data accurate with a very healthy spread where the market intelligence we provide for ocean freight rate is based on massive amounts of objective data. What is also important to note is that our data is dynamic; meaning that Xeneta updates as soon as data is imported. Companies in our platform either update daily or weekly - depending on their strategy. This means the data is fresh and can be viewed in real time and on demand. On the same note, we are a cloud-based software platform. We are not a shipper, a freight forwarder or a carrier. We either neither in partnership or related to any of the fore mentioned. Therefore, we are independent and objective.
He went on to listing the variety of leading industries we serve, most notably forest / P&P, automotive, mining / metals, chemicals, industrial, retail / FMCG, medical and technology. Many of our customers have been on board with us since the beginning, in particular those within the chemicals industry.
Think Outside The Square
Our presenters challenged the audience to think outside the square. One of our fundamental propositions is to change the way global logistics and shipping operate. Just because the market has always been volatile, it doesn’t mean that you/we have to suffer with it or take it as it comes. In this day and age, information is available everywhere, anywhere, all the time. So, we thought, why couldn’t we simply apply this same principle to one of the most important industries? For an industry that manages 90% of global trade, is it really supposed to be such a roller coaster ride when it comes to pricing? Price, rates, money – one of the key things that drive the global economy. Imagine how much better things would be if we would all think outside the box and make informed decisions based on facts alone which would complement the good relationship we have with our suppliers.
The entire industry is lacking transparency and we are stuck in an old school way of doing business. This was one of the key things we discovered after working many years with it, on the other side. It became increasingly difficult to get transparent information on ocean freight prices. Harsh as it sounds – most business disciplines have moved away from Excel spread sheets – and have been looking to technology to lead the way. Here comes into play the digital revolution. Technology brings urgency, accuracy, fairness and above all visibility. Who wouldn’t want this in our logistics and shipping industries? The container pricing regime is chaotic. Yes – we do deserve better.
How We Do It
Patrik shared how we source our data from either the shipper or the consignee – that’s in control of the supply chain. They either go long or short in the market – which usually corresponds on their annual volumes. We see a clear pattern that from more than 1000 TEUs shipped per year– shippers/BCOs tends to go long. We also source data coming from NVOCCs / Freight-Forwarders – which could be FAK, NAC Basket and NAC rates – but whichever data we receive; we tag it – so that our users can segment out the data they’d like to review – to capture relevant market trends.
If we go back to what we were trying to change in the industry, it looked like this: countless number of excel sheets. Patrik joked that most if not everyone attending the webinar works with this on a daily basis. He pointed out that every single rate sheet looks completely different. No standards whatsoever. No one can play ball together. It’s like deciphering a different language each time. We started out with some cargo owners and when they embraced the platform and the number of customers grew, the logistics service providers started to follow. It is what you would call B2B crowdsourcing. Companies are helping make each other make their businesses successful by forming a part of the digital revolution – the sharing economy. Data can be used for the benefit of all businesses. Big data makes this possible where Logistics Managers and/or those responsible for freight shipments don’t have to operate in the dark any longer when it comes to knowing if they are paying the right freight rate. They can simply compare their rates to actual rates from thousands of other companies shipping on the same routes – totally anonymous.
Patrik walked the attendees through a live demonstration of the platform – he used a real life, actual customer case for this session – so everything he showed was live in our platform and actual numbers. You can also request a demo and see firsthand the value Xeneta represents to your business.
AkzoNobel – A Case Study
Chemical companies ship a large volume of TEU's globally, but often their volume is diluted due to shipping this array of products over an equally large number of shipping lanes and ocean carriers.
AkzoNobel, a multi-product and multi-divisional global chemical company, is a long-term customer of Xeneta and it has been interesting to see their progress and strategic changes they have made in their supply chain with their use of Xeneta. With 55,000+ TEUs and approx. 6,000 shipping lanes, they needed to get a handle on the health of their supply chain. Xeneta's real-time metrics enabled AkzoNobel to establish benchmarks enabling them to track ocean freight rates on lanes relevant to them, and then utilize that data for informed decision-making.
Benchmarking - Without Facts, It’s Just An Opinion
If we think about the Akzo Nobel example, what they wanted was to get the temperature of their rate performance. Although, the market now is at a low, they can still be on top of knowing how their rates are performing. This leads us to why benchmarking ocean freight rates is important. You can use Xeneta to improve and measure your procurement activities. If you cannot measure it – you cannot improve it! Until now, there has been no global source with the size and density of rates that would make this possible. We grow stronger day by day. As Patrik so rightly said, because there is always someone smarter than you – match them or even surpass them by learning.
In addition to having the largest database in the world – and the biggest network of shippers/BCO connected to our platform – we deliver a beautiful software platform with a user-friendly UI which is fast and dynamic. We display data in a visually-pleasing manner that your mind can understand and make sense of. That instantly empowers you to drive your discussions and negotiations – based on data. Available for anyone – every time.