Overcome the challenges of ocean container transportation operations

  • July 28, 2023
Logistics and transportation of International Container Cargo ship in the ocean

Many organizations lose budget accuracy due to increases in contracted rates, and fluctuating spot rates & on ocean container lanes. For shippers using this mode of transport, a lack of visibility can impact the accuracy of ocean freight management, among other challenges. Unsurprisingly, many organizations spread their transportation spend across several modes — truckload, less than truckload, parcel, intermodal and ocean. Due to a larger focus on domestic spend, international spend, especially ocean full container load (FCL) often becomes a secondary concern.

If your organization needs only periodic ocean transport, this can prove problematic. Rate competition and your ranking among carriers is tied directly to the number of containers you control and ship with each carrier.

Mergers and acquisitions within the ocean industry limit competition and leverage. With these developments, smaller organizations that need ocean transport often pay elevated rates due to a lack of buying power in the market.

With this volatility in mind, you must consider all available methods to receive the best possible rates and access to category expertise and intelligence. Here are a few tips to help smaller shippers gain competitive value among ocean transport providers:

Collaborate to gain marketplace leverage. With a consortium partnership, you benefit from marketplace leverage through collective volumes. You’ll also receive incentives typically granted to large shippers, such as fixed rates for ocean and guaranteed capacity with the carrier of choice. Plus, you’ll gain visibility in a crowded market.

Use business analytics. Dashboard technology with centralized business analytics can help you better understand spend. It also helps you measure and achieve better results.

Alleviate stress through risk management. You can minimize negative outcomes and stay on budget by implementing a strategy that includes:

  • Pre-arranged service agreements
  • Contracts free from peak season surcharges(PSS) and general rate increases(GRI)

Seek and pursue strategic partnerships. Sharing ideas with other shippers and working together through an independent trusted advisor benefits all parties within the model. If you partner with other shippers through a buying group, you can leverage the market and gain “big” shipper value regardless of your organization’s size or the quantity of your shipments.

Partnering with an organization that has direct contracts with ocean lines creates value for your organization. You can:

  • Leverage contract rates, multiple carrier options and contract length terms
  • Avoid unnecessary fees while gaining additional free time at port entry points
  • Gain predictable freight costs through below market ocean rates that are free from PSS and GRI

Collaboration also provides category management opportunities previously unavailable due to:

  • Unfavorable terms and conditions
  • Isolation from other shipper strategies
  • Estimated quantity and destination limitations

Partnership advantages also include:

  • A contract management and rate searching tool
  • Track-and-trace capabilities
  • Electronic data interchange integration, which dedicates a full-time resource to carrier errors and corrections

A category management service will double-check your rate audits between freight bills and contract rates.

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