Why Port-to-Port Rates Really Matter

WHY PORT-TO-PORT RATES REALLY MATTER

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ABOUTXENETA

At Xeneta we believe there is an untapped potential for everyone in the industry, to systematically learn from our individual and collective efforts. We hold true that "if you cannot measure it, you cannot improve it". That’s why we think actionable metrics is the key to continuously evolve for every business, and ultimately the entire industry. Rethinking global logistics is the vision of Xeneta.

With international experience from the logistics industry, we have first-hand knowledge of the challenges related to high volatility and lack of transparency in the ocean freight market. By combining logistics background and information technology expertise, we found the solution to these challenges.

WE ARE TRANSFORMING GLOBAL LOGISTICS

CONTACT US. ARE YOU PAYING THE

RIGHT CONTAINER FREIGHT RATES?

DISCOVER SAVINGS POTENTIAL IN REAL

TIME.

IN TODAY’S BUSINESS ENVIRONMENT, COMPANIES ARE CONTINUOUSLY LOOKING FOR WAYS TO REDUCE LOGISTICS COSTS BUT IN ORDER TO IDENTIFY POTENTIAL COST SAVINGS, COMPANIES NEED TO DO THEIR HOMEWORK AND UTILIZE ANALYTICAL TOOLS TO ENSURE THEY’RE SECURING THE MOST FAVORABLE FREIGHT RATES.

WHILE BUSINESSES MAY ACTUALLY THINK THAT THEY HAVE OPTIMIZED

RATES BY ONLY FOCUSING ON DOOR TO DOOR RATES, THEY OFTEN FAIL TO REALIZE THAT THEY MAY BE MISSING

OUT ON OTHER OPPORTUNITIES.

RETHINKING THE THREE LEGGED SHIPPING ROUTE

WHEN CONSIDERING THE PROCESS OF OCEAN SHIPPING, IT’S OFTEN EASIEST TO BREAK IT DOWN INTO THREE PHASES, OR LEGS.

PRE-CARRIAGE

BEFORE THE CONTAINER IS DELIVERED TO THE PORT OR TERMINAL.

CARRIAGE

THE TRANSITION FROM PORT TO PORT.

ARE YOU PAYING THE RIGHT CONTAINER

FREIGHT RATES?

DISCOVER SAVINGS POTENTIAL IN REAL

TIME.

ON-CARRIAGE

AFTER THE CONTAINER IS PICKED UP FROM THE SUBSEQUENT TERMINAL.

THE PRE-CARRIAGE AND THE ON-CARRIAGE, THE INLAND MOVEMENTS BEFORE THE CONTAINER IS DELIVERED TO THE PORT/TERMINAL AND THE INLAND MOVEMENT AFTER THE CONTAINER IS PICKED UP FROM THE PORT/TERMINAL, OFFER THEIR OWN OPPORTUNITIES FOR SHIPPERS.

THE DOOR TO PORT AND/OR PORT TO DOOR LEGS MAY PUSH SHIPPING RATES ABOVE MARKET COSTS AND DRAG PORT-TO-PORT BENCHMARKING SHIPPERS INTO LESS FAVORABLE AGREEMENTS WITH CARRIER PARTNERS

WHILE THE OCEAN SHIPPING LEG ONLY OFFERS THE POSSIBILITY FOR SHIPPERS TO SWITCH FROM ONE CARRIER TO ANOTHER TO CONTROL COSTS AND SERVICE, THE PRE AND ON-CARRIAGE LEGS OFFER MULTIPLE OPPORTUNITIES.

SHIPPERS CAN CHOOSE BETWEEN DIFFERENT MODES OF TRANSPORTATION SUCH AS RAIL, ROAD OR BARGE AND THEY CAN OPT FOR THE TRANSPORTATION ACTIVITY TO BE PERFORMED BY EITHER THE SHIPPING LINE (CARRIER HAULAGE) OR BY THE CLIENT OR BY THEIR TRANSPORTER (MERCHANT HAULAGE).

OVERCOMING VOLATILITY

IT IS WITHIN THE CARRIAGE-LEG (PORT-TO-PORT) THAT PRICING IS THE MOST VOLATILE AND HENCE THIS IS THE FOCUS OF OUR PLATFORM – PORT-TO-PORT – WHICH INCLUDES SUCH CHARGES AS TERMINAL HANDLING, BUNKER ADJUSTMENT FACTOR, CURRENCY ADJUSTMENT FACTOR, CANAL SURCHARGES AND ALL OTHER PORT-PORT RELEVANT SURCHARGES APPLIED BY THE INDIVIDUAL SERVICE PROVIDERS.

FOR MARKET VOLATILITY AN EXAMPLE CAN BE FOUND

FROM A RECENT REUTER’S ARTICLE IN WHICH AMAZON’S

BEIJING CENTURY JOYO INDICATED IT PLANNED TO

CHARGE CUSTOMERS BETWEEN $530 AND $2,530 TO

TRANSPORT A 40-FOOT DRY VAN CONTAINER FROM

SHANGHAI TO HAMBURG. ACCORDING TO THE ARTICLE,

THE RATE IS COMPARABLE TO THOSE CHARGED BY OTHER

FORWARDERS, AND THE WIDE RANGE WOULD GIVE IT

FLEXIBILITY TO ADJUST ITS PRICES BASED ON VOLUME.

THE REAL-TIME DATA IN MARKET MOVEMENTS FURTHER PROVIDES THE MUCH NEEDED MARKET INTELLIGENCE THAT HAS BEEN MISSING UNTIL NOW FOR SUPPLIERS..

KNOWLEDGE OF CAPACITY CONSTRAINTS OR SURPLUS, DEMAND BY TRADE LANE AND OTHER MARKET INTELLIGENCE IS VITAL IN A GLOBAL ENVIRONMENT THAT IS SURROUNDED BY MUCH UNCERTAINTY AND RISK.

EVEN THOUGH SPOT MARKET RATES TEND TO BE THE MOST VOLATILE, BUYERS NEED TO ALSO MONITOR LONG-TERM RATES AS WELL BECAUSE LONG-TERM TRENDS VARY FROM THOSE OF SHORT-TERM AND WILL HAVE IMPLICATIONS TO BUYERS’ PROCUREMENT STRATEGY.

EVEN THOUGH SPOT MARKET RATES TEND TO BE THE MOST VOLATILE, BUYERS NEED TO ALSO MONITOR LONG-TERM RATES AS WELL BECAUSE LONG-TERM TRENDS VARY FROM THOSE OF SHORT-TERM AND WILL HAVE IMPLICATIONS TO BUYERS’ PROCUREMENT STRATEGY.

LEARN HOW XENETA CAN HELPYOU GET INSIGHT AND

INTELLIGENCE INTO YOUR GLOBAL OCEAN FREIGHT PRICES AND CHANGE YOUR LOGISTICS

BUSINESS:

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