Seven Steps to Excel at Ocean Freight Efficiency 

Freight Rates Drop…

This eBook can help you adjust to the new global economic reality, while still achieving smooth ocean freight business operations and managing customer expectations in the face of delays. Freight forwarders (FFs), beneficial cargo owners (BCOs), importers, and exporters deploying artificial intelligence technology featuring exception management and close tracking of ocean freight milestones are cutting through the noise to focus on the key issues that will improve their margins. This will be critical moving forward. 

An article published in March 2023 in The Wall Street Journal paints a dire picture for shippers and other organizations that support the supply chain. Management members at shipping companies are facing plunging exports and falling freight rates:  

“The falling volumes have pushed global ship freight rates into a downward spiral, with the cost of sending a box from China to Los Angeles dropping to $1,238 this week from $15,600 this time last year, according to the Freightos Baltic Index. 

The shipping industry now faces the same uncertainty that surrounds its biggest customers such Amazon.com Inc., Target Corp. and Home Depot Inc. If American consumers keep spending, bloated inventories will be drawn down and demand for imports will resume. But if the economy contracts, freight rates are expected to fall below break-even levels and kick off a new series of price wars among carriers that in the past led to multiyear losses.” 

These economic conditions will affect – either directly, or via the demand side – the entire ocean freight ecosystem. Let’s outline the landscape and then focus on efficiency and ROI…

Delays Damage the Bottom Line

Once a container is loaded on a vessel, tracking it and anticipating its arrival time remains a constant challenge.

With customer demand for transparency and real-time tracking increasing, the shipping industry has more stakeholders to please. 

Reliability rates are close to their unimpressive pre-pandemic benchmark, but the disruptions caused by the coronavirus and their disastrous impact are still fresh in everyone’s minds. 

For freight forwarders, importers and exporters, beneficial cargo owners (BCOs), and others in the supply chain ecosystem, delays are damaging and unfortunately prevalent, and can lead to detention and demurrage fees. Over 40% of shipments are delayed. Considering this reality, you would think it would be easy to quickly understand why containers are delayed and when they will actually arrive, but this remains a huge challenge.

This uncertainty can prevent planning optimization, damage your customer relationships, and reduce profit margins/increase costs. 

Statustic image Delays Damage the Bottom Line

Rebookings Waste Time & Money

Rebooking a delivery can be time-consuming and costly: 

  1. When deliveries need to be rebooked, it increases the workload for operators and this labor-intensive manual process is often repeated over and over. 
  2. Depending on the local haulage market, if delivery changes are made on short notice, the total cost of the delivery may be charged, subject to haulier T&Cs. 
  3. Rebookings can understandably cause customer frustration, and without a source of truth for ETAs, the operators can’t give any clear answers and have to constantly guess why ETAs keep changing. 
  4. Amending releases can be time consuming. When you amend the haulier and/or delivery date, often the release will also need to be amended. Deliveries can be at risk if carriers have not actioned the release amendment. This leads to operators spending a lot of their time chasing for updates, reducing the time for customer-centric tasks.
  5. The window for delivery is small and it’s challenging to get the delivery date correct. If you have five days of free time and it starts on the day of vessel arrival, but the container doesn’t discharge for two days, that means you actually have three days of free time. But what if it falls on a weekend? Then you’ve only got one day.

Choosing the Right Corridor for Your Cargo

Choosing the right corridor for your cargo is much easier if you have a general understanding of the efficiency levels and congestion statuses of the world’s leading container ports, including transit times, efficiency based on call duration by different container vessel sizes, overall pressure based on TEU capacity sailing into the ports, and more. 

Niels Helles Borgen, independent advisor and experienced port and supply chain professional, has some additional tips. 

In choosing the trade lane and corridor through which to route your cargo, Niels cites four key considerations:

  • The proximity of origin to useful gateway ports
  • Availability of cost-efficient landside transport capacities
  • Availability of cost-efficient ocean transport capacity
  • Import gateway most likely to deliver a stable predictable flow and landside transit to the destination

The key data points to observe in choosing a trade lane and corridor for your cargo in Niels’ experience are capacity and the reliability over time of relevant gateways for your organization. 

You can go deeper on this topic here (including important transshipment considerations).

Highlights Choosing the Right Corridor for Your Cargo

Windward Can Help!

Windward Ocean Freight Visibility (OFV) leverages the capabilities of our award-winning Maritime AI™ technology, which has helped our customers for over a decade. Our deep learning and machine learning models generate real-time ETA predictions for the entire global fleet of container vessels and continuously calculate congestion levels at all container ports, providing the most accurate container ETAs.

Windward Ocean Freight Visibility is also available via API, reducing integration and testing time by more than 90 percent.

OFV includes: 

  • Maritime AI™ Predicted ETAs
  • Real-time visibility
  • Port performance insights
  • Reasons for delay
Comuter and icons Windward Can Help

You Can FINALLY Understand Reasons for Delay

“Knowing your shipment is delayed is a necessity, but knowing why your shipment was delayed further empowers customers to take action, save costs, and minimize the business impact of delays,” said Ami Daniel, CEO and Co-Founder of Windward.

Windward has enhanced our ETA Insights with the launch of a first-of-its-kind Reasons for Delay. Windward Ocean Freight Visibility users can finally access unbiased information and answer the unavoidable follow-up question to any delay update – “Why?” 

This will eliminate the need to chase carriers, terminal operators, and others to try and piece together the chain of events that led to the delay. Listed reasons for delay: 

  • Transshipment delay

According to Windward’s research, 25% of delayed shipments are caused by a complication during the maritime transshipment. 

  • Rollover 

Can be caused by carriers overbooking space on the vessel scheduled to transport a container, leading to the inability to load it onto that vessel due to lack of space or excess weight. Another reason is unplanned rerouting of the allocated vessel.

  • Late departure 

Seemingly the most obvious reason of them all, right? A container is late because it was late to leave the port of loading. 

  • Short transshipment buffer

Transshipment has a high risk of not being completed as scheduled, due to the TS window being too small.

  • No vessel allocation

No vessel has been allocated to load your container(s) at the POL or TSP.

  • Unfeasible journey

The expected transit times provided by the carrier are too short, based on Windward data and estimations.

Actionable Visibility for Decision Support

Visibility in and of itself is no longer enough (especially with the potential for many more delays due to the recession). Knowing you have a problem (when it’s too late) is also not sufficient – actionable insights that enable organizations to be proactive are the main need across the board.

AI should fit in and fill the gaps in current decision-making workflows – it must work for the organization, and not vice versa. Predictive analytics that can flag realistic risks, without paralyzing the business with false positives, is critical. And merely possessing information on port congestion is not worth much if an organization cannot take action and figure out how to avoid demurrage charges.

This next iteration of visibility (actionable visibility for decision support) is valuable when it empowers supply chain organizations to: 

  • Avoid fees and penalties
  • Make more time to serve customers, by automating mundane tasks 
  • Offer clarity on delays, to improve customer service
  • Optimize planning, leading to cost savings 

Excel at Efficiency!

Supply chain and logistics leaders are seeking to achieve cost-efficient operations and better ROI. Here are seven steps you can take with the assistance of an innovative, AI-powered ocean freight visibility solution: 

  1. Automate your processes and possess the most accurate information at your fingertips, via real-time updates on all shipments. This will eliminate the need for manual checks, saving valuable resources. 
  2. Closely track ocean freight milestones, including information not offered by many of the major carriers, to improve customer service and better understand how to plan. 
  3. Get customers the answers they need quicker than ever before with the ability to quickly share shipment updates, including an interactive map with the current location and predicted ETA. Customer service costs will be reduced. 
  4. Avoid discrepancies and save money by knowing exactly when containers departed their POL and arrived at their POD. Real-time updates, containing accurate information, will enhance detention and demurrage cost management. 
  5. Minimize the need to amend haulage bookings by receiving the most accurate ETA predictions in advance, allowing personnel to lock in correct arrival times for containers. This can help lower costs related to ETA changes. 
  6. Pinpoint the most cost-effective options for shipments and execute performance-based negotiations with carriers, with insights on port and terminal congestion, turnaround efficiency, transit times, and more. 
  7. Utilize exception management. Focus on the containers and vessels that will most affect your bottom line and propel your business forward. 

Sound Too Good to be True?

Talk to us to get full visibility into our industry-leading technology. Start winning with Windward!