Time is money.
No matter what industry we talk about, the importance of time is always the highest priority as it governs the basic functioning of all organizations. Every business activity today involves some form of financial investment, which could experience drastic financial consequences in case of a delay in processes. The ocean freight industry is no different. Most of the retail businesses depend heavily on their freight forwarders/shipping lines for the transportation of products to their end clients. Freight forwarders help shippers in the identification of the best-suited shipping line along with arranging for booking with the line which moves the cargo from one port to other. With the spread of globalization now, there is an increased number of products transported from one end of the world to the other. Further, with transit time being on the higher end in the case of ocean freight, availability and reliability of the schedule are of utmost importance for all the shippers.
In traditional freight forwarding, normally the options provided for a particular lane are limited to the forwarder’s contacts with shipping lines, which is further dependent on the business volume of the forwarder. This limited information on available options limits the shipper, as they are unaware of other possible options. Digitalization of the ocean freight industry brings an end to this opacity, as new platforms are providing details of all available options with better accuracy. This change strengthens the shipper’s decision-making for a better selection, which best suits his shipping requirements.
In addition to the availability of options, another important aspect of decision-making is carrier schedule reliability. It is important for the shipper to know how reliable the selected carrier is, as planning could go haywire if there is any form of delay. A survey of Quarter 3, 2017, by SeaIntel, which took into account arrivals of over 38,000 vessels and 18 carriers, revealed that OOCL from Hong Kong was the most reliable carrier across all routes with an 83.3 percent success rate. The list of top 5 reliable carriers also included Evergreen (82.5%), Wan Hai (82.5%), APL (82.3%), and HMM (82%). Experts from the ocean freight forwarding industry added that the success of OOCL came as no surprise due to its smart and heavy investment in IT and the steps taken further towards digitizing the carriers.
Late arrivals in the ocean freight industry do not just mean a late arrival of the package for the customer; it has major financial implications on the businesses too. Companies have to bear heavy costs in the form of inventory costs and further extensions in warehousing time in case their carrier has low schedule reliability. Thus a problematic schedule reliability of the carrier can result in unanticipated costs for businesses.