We are proud to announce that we here at Ocean Insights were recently invited to participate in a webinar with CargoNow, for a fireside chat with some brilliant minds in supply chain management from Japan. For those that missed the original broadcast, we wanted to share some highlights of the webinar and detail the importance of real-time and predictive data.
Our world moves faster than ever. With a touch of a button we can connect with someone halfway around the world, or find an answer to just about any question we can think of. During a time of global uncertainty, we can do our shopping without ever having to leave the safety and comfort of our homes. Every aspect of our modern lives all shares one distinct commonality. It’s all driven by data.
In the world of Ocean Freight, this especially holds true. The vast majority of goods, from raw materials to finished goods, moves across the ocean. However, ocean freight is subject to horrible inefficiencies brought on by outdated and antiquated processes and methods. As a result, shippers end up paying more to move their goods than they should be.
Fortunately, there is a light being shined on these problems, and new technology is being applied to transform the ocean freight industry into something decidedly more efficient.
Are Customers Willing to Pay for Better Visibility?
This was among the first questions asked and perhaps one of the most important. Customer expectations are growing decidedly, due largely to the “Amazon Effect” which has created a sense of instant gratification among consumers. Amazon continues to cut down shipping times, offering two day, next, or even same day deliveries, all while letting customers see where their package is with a few clicks. That level of expectation has grown from a consumer level to a professional level.
The real question is, are customers willing to pay for that service?
The general consensus from our partners in Japan is, Yes, customers are willing to pay a premium, but with a few caveats. Supply and demand are constantly changing, and the balance is crucial when it comes to forwarding the costs on to the customer. When capacity gets tight, and the deadlines are even tighter, there is a need for that higher level of visibility regardless of industry. Of course, ROI and proof of value are important to this discussion as well, as most companies aren’t willing to shell out for a new system if they’re not more or less guaranteed of a healthy return on their investment.
Another interesting point that was brought up is the need to work from home during the pandemic. A good platform that provides higher levels of visibility when working remotely is becoming more crucial as companies continue to seek out ways to keep productivity flowing while everyone is out of the office.
The flipside to what customers are willing to pay is when you consider it as a cost saving measure. When we look at the process of data entry for shipments and the “traditional” way of tracking and tracing a container, it becomes a very involved process that someone has to be paid to do. If the process were automated, personnel could be reallocated to a higher value added task while reducing the possibility of errors in the data entry process.
Efficiency is Key to Operational Success During the Pandemic
This is true of day to day operations during the best of times, let alone the current situation. The global supply chain for ocean freight is rife with inefficiencies. A study from Shanka concluded that in just one shipment from Asia to Europe, there are approximately 30 people involved in the process with over 200 communications in the transaction from end to end. A simple mistake or keystroke error could delay the entire process, costing the shipper a considerable amount of both time and money.
Even after the pandemic ends, and business returns to normal, we’re going to see a continued need for visibility, even as that need varies from customer to customer, the overall need will continue to grow. One of the biggest reasons being the need for higher levels of efficiency. As our own COO, Josh Brazil, put it:
“Our typical use case is either going to be freight forwarders or shippers. And usually they’re coming to us because they’re traditionally doing manual processes. Maybe they’re just searching the website of the carrier and getting the BL number, putting that into an Excel table, entering that [data] into their own system. It’s a very manual process and it’s always been a manual process. Probably to most people’s surprise is that they’re still doing this a lot in various organizations. Well, obviously when you get beyond several hundred containers that you’re trying to track and trace on a daily basis, of course, that doesn’t make any sense.”
Visibility Means More Tools in the Box
Perhaps one of the most important takeaways from this webinar is that visibility offers an organization so many more solutions and opportunities than simply answering “Where is my box?”.
For freight forwarders, visibility tools are an extra service (and value) that can be added to a customer, making a partnership that much more valuable to shippers. As for shippers, the ROI for simply cutting down on detention and demurrage fees alone makes the system pay for itself exponentially in a very short period. Visibility, at any level of the supply chain significantly ratchets up productivity and efficiency while minimizing the potential for errors, giving organizations a competitive advantage in an ever growing field.
As these takeaways are only a brief summary of a much more comprehensive webinar, we encourage you to watch our fireside chat with CargoNow to learn more about the importance of visibility and predictive data and how they can benefit your business. For further reading, please download our Whitepaper on the ROI of an Ocean Freight Track System (OFTS) here:
What’s the ROI of an Ocean Freight Tracking System?
As a shipper, forwarder, or beneficial cargo owner (BCO), you know you need reliable visibility of your shipments. With so many different data sources, having an Ocean Freight Tracking System (OFTS) is vital.