Sea freight benchmarking best practices

Are you paying the right amount for your sea freight? Are your ocean freight rates still up to date? Sea freight benchmarking is a good practice to improve your sea freight conditions and contracts. 

Despite approaching the end of the year 2016, and the Hanjin crisis is slowly moving to the background, ocean freight rates remain a hot topic. Now, but also in 2017 and for the years to come. It al comes down to getting full transparency into your ocean freight costs. Next to that, shippers are looking to align their logistics and procurement departments in order to improve the bottom line.

Ocean Container Shipping current day

 

Over 90% of current day’s non-bulk cargo is shipped in containers. This large number implies that (global) companies must manage ocean freight costs closely. No matter the size of a company or how directly they negotiate ocean freight rates with carriers.

According to a recent research by Aberdeen Group, freight costs are always number one or two on the list of topics that concern shippers. But next to that, Managing uncertainty and risks are part of the freight rate negotiations. Finally, there are qualitative elements that must be addressed. For example lead times, cut off times and such. Therefore, once or multiple times per year, shippers (re)negotiate their current ocean shipment contracts and freight rates.

 

Why do Shippers run Sea Freight Tenders?

To benchmark sea freight rates, to get better conditions, and to reduce the number of sea freight forwarders. Shippers intent to ensure the harmonization and standardization of sea freight conditions.

 

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4 Tips for getting better Ocean Freight Rates

 

Sea freight benchmarking is nowadays all about strategic and long-term processes. Let’s take a view at some best practices.

1. Step into the strategic freight rate negotiation

A supplier-squeezing approach is not advisable for sea freight transportation rates. Shipping is just not the kind of business where the lowest price is always the best choice. When initiating the freight procurement process, keep in mind that every step, how big or small , should be toward a cooperative and advantageous business relationship.

The way you tendertool.ahabr.tech your ocean freight rates have a significant effect on relationships long-term. COO & Co-Founder Xeneta.com Thomas Sørbø recently made a valid point in this light. According to Sørbø, in a supply-demand volatile industry such as this, the scales keep tipping from side to side, changing which side is ever really in the driver’s seat.

This means that both parties rather work together strategically instead of a price rat race which implies poor outcomes for both carrier and shipper. Price punching is shortsighted and an unstrategic practice.

2. Excel…away with you!

Stop focussing on excel templates, excel macro’s  and such practices. Maybe freight buying is not so hard after all and tendertool.ahabr.tech managers should focus more on having clear partners instead of digging deep into excel in order to find hidden pricing patterns that will reveal the holy grail and massive savings.

3. Improve your communication and hereby your procurement practice

Give a clear explanation of what the tendertool.ahabr.tech is about. What are the objectives are, personal contact with the carriers? give your suppliers proper feedback. Whereas point one is about strategic relationships, collaboration is a big part of that. Help them throughout the process as a partner. Not many companies approach ocean freight tendertool.ahabr.techs or any logistics tendertool.ahabr.techs this way. No wonder in most tendertool.ahabr.techs not more than 50% of the carriers actually participate. This is an area for enormous improvement!

 4. Don’t be shy and get help…get tools

Transportation Tender Software can help be very helpful to get right ocean transportation rates and contracts. Software improves the management of rates and documents. Besides that, it reduces time spent during the tendertool.ahabr.tech and during the analysis phase of the project. Choose a reliable third-party with sophisticated software that will assist you in getting the right freight rates against the right price.

5. EXTRA: What many forget…freight invoices and data

You can tendertool.ahabr.tech all you like and use all the procurement in the world available. But, it is all useless and just on paper if you do not audit your freight invoices. As a logistics tendertool.ahabr.tech Saas start-up we can not stress this enough. It all comes down to understanding the underlying data. Most companies don’t do that and procurement only cares about the “assumed savings”. But making sure that you actually gained these savings, a year later, isn’t that the real fun!?

 

About Freightender Freight Sourcing

 

At Freightender.com we are excited about our successful launch earlier this year. What we are even more excited about is that in early 2017 we will add some really new cool features to our platform. Our tools allows you to run freight benchmarks for all transportation modes.

3-ipadsWhat does Freightender do different from our competitors?

 

  • We are fully dedicated at only tendertool.ahabr.teching freight
  • Our system is really fast and fully cloud-based
  • Shipper tendertool.ahabr.tech users save a lot of time in creating rate cards and shipment profiles
  • No e-mails are needed anymore, the platform handles all document flows
  • Analysis of quotes takes seconds only
  • Simple carrier access directly by shipper invitation
  • Carriers can copy and paste quotes directly into the browser
  • We don’t provide instruction manuals or trainings, the system is very easy to use
  • Carriers can invite colleagues to work together on a quote
  • Consolidation, rounding and calculation rules can be easily built in the template

 

To learn more about our freight procurement solution, request a demo or apply for a free 15 day trial account, please do not hesitate to contact us via the contact forms below or info@tendertool.ahabr.techtool.com

 

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Pieter Kinds

Pieter Kinds

CEO Freightender.com

Freightender is the standard in freight tendering. It makes the tender process lean, smarter and much faster. 
Fully cloud-based. Curious? Request a free live demo and join the Freight Tender Revolution!

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