Simplicity & Efficiency

General updates on the subject of Simplicity and Efficiency in freight forwarding

3 Reasons Why the Freight Rates are Record-High

 

Freight rates for shipping and transporting goods are going through the roof. What happened and why do we see such an unprecedented surge in freight rates?

 

Freight rates for shipping containers from China to Europe and the US have gone up to the unseen levels. The Shanghai Containerized Freight Index (SCFI), which is used to measure the average spot rates from Shanghai on the major trades, increased by 3x compared to last year (or any other year for that matter). For example, freight rates from Shanghai to the US West Coast rose to a new record of $4,054 per TEU – a 20% increase!

 

1. The Corona Combo

 

The lockdown is a direct effect of the COVID-19 pandemic in 2020. First, it was the lockdown in China at the beginning of the year, and a couple of months later  – everywhere else in the world. The economic lockdown affected the flow of goods: due to the closure of factories and plants, bookings were canceled. This resulted in blank sailings and capacity cuts. Passenger planes stopped the delivery of the airfreight cargo, causing a surge in prices for the limited capacity of the cargo planes.

Freight rates blank sailings Quotiss

During the summer of 2020, the flow of goods continued almost “as usual“.  But then, another unexpected Corona effect kicked in – the change in consumer behavior.

As Vincent Clerc (Maersk CEO) put it: “We hadn’t foreseen just how Covid would be able to change consumer patterns,” he said, adding that acceleration in demand has been the fastest in at least 10 years. “People use a much, much higher portion of their wages on goods.

It’s true. There is a change in the spending patterns. When the services became unavailable (restaurants, beauty, tourism, entertainment just stopped), people switched to buying more physical goods that need to be transported. Retail sales in the U.S. in December rose by 4.8% compared to the same period in 2019, causing the surge in demand.

 

2. The Shortage of Equipment

 

A conspiracy theory goes like this: all shipping lines had a secret meeting and decided to send half of their equipment to an uninhabited island far away. This theory could be false, but the truth is that there is a significant imbalance of empty containers on Asia-Europe trade.

Commitment agreements with the shipping lines used to be a space and equipment guarantee in the past, but it doesn’t solve the problem anymore. Even with commitment in place, it’s close to impossible to get an empty container in China these days. Carriers introduced a number of surcharges, pushing rates even higher. For example, Maersk Line is working on a number of initiatives called ‘Delivery Promise’ which should replace the standard ‘commitment’ agreement.

This is very frustrating to shippers. They have to accept the new rules of the game: “Ongoing service unreliability, coupled with the record profits of shipping companies at times of crisis, clearly depicts a seriously disrupted market and demonstrates that carriers have been passing tremendous hikes on spot rates, imposing heavy surcharges above the fixed-term contractual rates,” says Denis Choumert, president of the European Shippers’ Council (ESC).

 

3. Supply & Demand is King

 

COVID-19 and the equipment shortage are both valid reasons for the current freight rate spike. However, the main cause for the rate fluctuations on the market is always the supply & demand balance (or imbalance, to be precise). The lockdown contributed to increasing demand and the lack of shipping containers in Asia resulted in a limited supply. Consequently, freight rates have doubled.

Market forces are the main driving factor behind the freight rate fluctuations. Factors such as fuel prices, distance traveled, terminal costs, etc. don’t impact freight rates as much as supply and demand do.

According to the United Nations Conference on Trade and Development (UNCTAD):

“In general terms, the demand and the supply of maritime transport services interact with each other to determine freight rates. While there are countless factors affecting supply and demand, the exposure of freights rates to market forces is inevitable. Cargo volumes and demand for maritime transport services are usually the first to be hit by political, environmental and economic turmoil. Factors such as a slowdown in international trade, sanctions, natural disasters and weather events, regulatory measures and changes in fuel prices have an impact on the world economy and global demand for seaborne transport. These changes may occur quickly and have an immediate impact on demand for maritime transport services. As to the supply of maritime transport services, there is generally a tendency of overcapacity in the market, given that there are no inherent restrictions on the number of vessels that can be built and that it takes a long time from the moment a vessel order is placed to the time it is delivered, and is ready to be put in service.

Therefore, maritime transport is very cyclical and goes through periods of continuous busts and booms, with operators enjoying healthy earnings or struggling to meet their minimum operating costs.”

 

The Conclusion

 

Shipping lines are finally in a good place, making up for the previous years of low margins. Ships are loaded with high yielding containers, the spot market is at an all-time high, and the customers are forced to accept higher rates when signing new long-term contracts.

Freight forwarders make the biggest margins on the fluctuating market, so they are in a good place, too. Although, their sales and booking teams must be under a lot of pressure now.

Importers and exporters, on the other side, have to deal with the new reality of shipping rates. Their dilemma is difficult – accept the “ridiculously high” spot rates, or wait until the market will “normalize“. But as the wise saying goes: “It’s very difficult to predict, especially the future”. Who knows, maybe these rate levels are the new normal?

Key Sales Metrics

5 Key Sales Metrics in Freight Forwarding (And How to Improve Them)

Most freight forwarding companies around the world set the key sales metrics for their commercial teams, and regularly produce thousands of sales performance reports. But these reports don’t necessarily tell how to improve the numbers. Whether you’re new to sales or a seasoned expert, it’s always worth getting a fresh perspective on your own stats, data, and metrics.

Why? Because bringing your sales team from good to exceptional is only possible when you know the cold, hard numbers. Let’s break down the 5 key sales metrics that matter the most to help you understand exactly what it’s measuring, why it matters, and a few tangible ways to improve them.

 

1. Freight Quote Volume

 

The freight quote volume is the total number of sent freight quotes. Start tracking this key sales metric to get a general understanding of how many quotes your salespeople generate per day, per week, and per month.

  • Why is it important to measure?

The number of sent freight quotes indirectly correlates with the number of bookings you win as a result. Of course, there are more factors that influence customers’ decision to book with a specific freight forwarder, but still –increasing the number of sent quotes, will naturally grow the $$$ outcome.

  • How to increase the number of sent freight quotes?

Simplify and automate the process of creating a freight quote, without compromising the quality of the quote. Quoting software should be user-friendly and intuitive, very easy to use, and practical.

 

2. Number of Accepted Quotes

 

Another parameter, which is essential to measure the performance of the sales team. At the same time, we recommend to keep track of the quotes which were declined by the client, and always ask for the reasons behind this decision.

  • Why is it important to measure?

An accepted quote is a commitment from the clients’ side and an indicator of a successful sale. The number of accepted quotes has a direct correlation with future bookings.

  • How to increase the number of accepted quotes?

We recommend analyzing the rejected quotes. With the advanced reporting feature in Quotiss, you can track rejection reasons by route, by the client, by shipment type, etc. This should give you a few ideas on how to increase quote acceptance.

 

3. Quote Win Ratio

 

The percentage of accepted quotes, also known as quote win ratio, can be an excellent key sales metric for efficiency. This is a very important parameter, which can be measured on the company level, team level, per person, by specific trade, per client, etc.

  • Why is it important to measure?

With these powerful stats, you will gain insights into your most efficient products, teams, directions, and more.

  • How to increase the win ratio?

Following the formula win ratio = accepted quotes / total quotes, you should work on increasing the number of accepted quotes (obvious) or decrease the number of sent quotes (less obvious).

It might be counter-intuitive to decrease the number of sent quotes, but sometimes it makes sense. With Quotiss’s advanced customer dashboard, you can quickly identify accounts that never converted from quote to booking. Those could be the ones to let go and to focus on new leads instead.

 

4. Number of New Leads

 

In economics, one has to run to stand still. And “if you want to get somewhere else, you must run at least twice as fast as that” – The Red Queen. The number of new leads is a very important key sales metric for the team, essential for business growth.

  • Why is it important to measure?

Sales reps should always develop new leads to grow their portfolio and achieve targets. The lead generation process can be quite costly for any business, and it can be a complete waste of resources without proper follow-up.

  • How to increase the number of new leads?

We will prepare a separate article on lead generation in freight forwarding. Here is just simple advice: simplify and automate the process of adding a new lead to your quoting system. The client management module should be user-friendly and intuitive, very easy to use, and practical.

Sales reps don’t want to spend 20 min of their time to update all required fields in their CRM to create a new record, especially when there is an uncertain chance of success. Sending a ‘test quote’ to a new lead should be fast and fully automated.

 

5. Average Margin

 

None of the above key sales metrics make any sense if quote margins are not healthy. It is very easy to achieve exceptional results with the key sales metrics if you are selling freight below the market level.

  • Why is it important to measure?

We assume that every freight forwarding company is in this business in order to make a profit (unless you are a digital freight forwarder with many $$$ from VC funds).

  • How to increase the average margin?

This is a trick question, that depends on many aspects of your business specifics. But we recommend measuring it. Rephrasing Peter Drucker: if you can measure it – you can manage it, and if you can manage it – you can control it, and if you can control it – you can improve it!

Quotiss software can help you to measure these 5 important sales metrics, automate your sales process, and follow up and simplify your sales routine. This is especially crucial at a time when most sales teams work remotely and need smart and simple software to collaborate efficiently.

Ready, Set, Automate!

Click here to register your Quotiss account. We’ll help with the initial settings and user onboarding. You can start quoting freight instantly on the same day we sign the deal.

Maersk Spot Quotiss

Maersk Spot is Integrated with Quotiss

We are happy to announce the integration of the Maersk Spot product with Quotiss Freight Software. Quotiss is now using Maersk Spot APIs, allowing seamless connection with the single sign on to our customers.  With this integration, freight forwarders can check Maersk Spot rates directly in Quotiss, compare Maersk Spot rates with the other contract rates, and quote instantly.

 

What is Maersk Spot?

 

Maersk Spot is a unique product of its kind. It enables instant freight quotes, guarantees equipment availability, and cargo loading on Maersk, Sealand, and Safmarine services irrespective of the peak season at a fixed price.

Mr. Marcin Zarzecki, CEO of Quotiss, says, “Maersk Spot integration is an important first step towards deeper freight digitalization. We can’t wait for other ocean carriers to follow this trend to share freight rates via API.

The quick access to the dynamic online spot rates feels like a digital revolution in the industry. It’s not a secret, that pricing and quoting freight in shipping is largely manual and involves a lot of back and forth email exchange of large Excel freight ratesheets. Enabling rate access in one click via API, shipping lines save a lot of time for freight forwarders. Enabling rate access to third-party software providers, like Quotiss, shipping lines create a solid digital foundation for further industry digitalization on a larger scale.

With this integration, Quotiss aims to promote online freight rates and enable online bookings, using a very simple and intuitive user experience. It is also another step towards selling freight online.

 

The Benefits of the Integrated Maersk Spot Product

 

Maersk launched Maersk Spot in early 2019, and even though the product doesn’t yet cover all trade lanes and container types, it is already very mature and stable. This is a revolutionary step in the right direction, long-awaited by all industry players. Simplification is the key for the digitalization when it comes to freight rates.

A number of our clients told us that they had been waiting for this product for 2 main reasons:

  • No need to login to Maersk.com separately to check the spot rates on each corridor (single sign-on saves time);
  • Advanced software integration with ocean carriers adds winning points to the competitiveness of their services.

This might be a biased statement, but as a person who spent 10 years working in Maersk Line, I’d like to add, that Maersk is one of the most innovative companies in the industry. They are well known for being a trendsetter in the digitization of container shipping, and hopefully, other carriers will follow this rate API trail shortly. #alltheway

 

About A.P. Moller – Maersk

 

A.P. Moller – Maersk is an integrated container logistics company working to connect and simplify its customers’ supply chains. As the global leader in shipping services, the company operates in 130 countries and employs roughly 76,000 people. For more information: www.maersk.com

 

Quick-Start with Quotiss Software

 

These days, efficiency becomes a very strong competitive advantage for forwarders. Since there is less cargo on the market as a consequence of COVID-19 pandemic, it’s important to win as many bookings as possible.

Sales teams in freight forwarding companies can be very efficient with the right set of sales automation tools. Quotiss software could be the right solution to digitize your sales process. You will increase your sales productivity without increasing headcount. When your business is driven by efficiency, it directly impacts your company’s bottom line.

Click here to register your company in Quotiss. We’ll activate your account, and help with the initial settings and implementation. You can start using Quotiss on the same day we sign the deal.

Freight software Quotiss

5-Step Guide to Choose The Best Freight Software

Warning: the best freight software doesn’t exist.

 

Every freight forwarder is now bombarded with messages about the inevitable digitization of freight and the equally inevitable death of traditional analog forwarding. Chances are, you’ve already reviewed a couple of software options for your sales team. Maybe, you’ve implemented some tools by now, but still, monitor the market for better freight software solutions.

Software solutions on the market are very different in terms of their features, functionality, price, and many other factors. Some of these solutions are (technically) the “most-used” or “highest-reviewed” of all the available tools—although, it varies greatly depending on the source you turn to. The truth is you don’t want to look for the “best of the best.” Rather, you want the best-fit freight software solution for your business.

Finding the right freight software for your sales team isn’t something that’s going to happen overnight. But, by investing the proper amount of time and energy, you’ll ensure this will pay off in the future. And our 5-step guide will help you navigate in the sea of options.

 

1. Start with your team

 

First, get an idea of what a “day in the life” looks like for your sales rep. Ask questions regarding their efficiency and impact on customer experience, as this is what you want to maximize with the new software. Ask for input regarding the desired features in freight software for them. For example:

  • What tasks do they typically perform every day?
  • Where do they regularly face slowdowns or obstacles?
  • What actions or efforts on their part are most appreciated by customers?

Next, review their current tools. Generate discussion around topics such as:

  • Where does your current solution allow them to be most effective?
  • Where does it fail or cause frustration?
  • What tasks do they find themselves doing over and over?
  • What features most benefit the customer experience, and what do not?

Don’t forget to cross off the unrealistic expectations.

 

2. Determine your specific needs

 

This next step follows the previous – consider how the use of a new freight software fits into your current sales processes. Ask tactical, customer-centric questions such as:

(a) What formats do you need to use?

Speaking of sales & procurement process, think about the channels and formats that your customers & suppliers use. Is it an e-mail with a detailed freight quote in attachment or a quick all-in indication? Is it a message in WhatsApp (WeChat) or a large Excel freight ratesheet with all possible port-port combinations and costs? Or maybe, a link to their online self-quoting platform, like Maersk Spot?

The right freight software should allow you to be very efficient with managing your suppliers and very flexible with catering to your clients’ needs in a format that they want to use.

(b) What specific features and functions do you need?

Sales automation software is meant to streamline your sales processes as a whole. How these tools do so depends on the individual tool in question. Most freight software solutions have their own fixed set of functions and features. It’s up to you to determine which combination will benefit your organization the most. The bare minimum is this (for all the obvious reasons):

Most freight software solutions come with the above features, so you will have to consider the quality and simplicity (ease of use) of these features.

(c) What other tools need to connect?

Chances are you already use other digital tools, like CRM or TMS. Your new freight software solution should integrate well with the software you currently use. Your commercial business data should be synced to ensure the most accurate information.

 

3. Make a list of options and narrow it down

 

Make a list of all of the software solutions that could potentially benefit your sales team. You can use software discovery and comparison tools like Capterra. Select the right software category: Freight Software, Shipping Software, Logistics Software. Apply filters to sort the results. Read the verified user reviews.

Add important information about each solution: price, contract terms, key features, etc. Go through the list with your team, and focus on the features each software solution highlights.

Narrow the list down to at most five choices:

  • remove any software that is not designed for freight forwarding.
  • remove any software that doesn’t have the features you’re looking for.
  • remove any software that is too complex.
  • remove any software that is too expensive.

 

4. Test-drive your shortlist

 

Contact each software provider to schedule a demo of their product. These demos are created to show exactly what potential customers should expect from the software. Additionally, you get to engage with the provider and gather more information about them.

To further help you come to a decision, you’ll likely be able to sign up for a trial. It’s important to implement each tool within your sales team instead of testing it only on the simulated situations. While it may seem a bit risky to undertake this sort of “trial by fire,” that’s the point.

The best solution for your team will be the one they’re able to easily pick up and run with. On the contrary, if your sales team isn’t able to quickly get along with the new tool, chances are this will be only the beginning of your troubles with this software.

At this point, you’ll have covered pretty much all the bases:

  • Assessed your options from a variety of perspectives and angles
  • Viewed demos of each of your top options in action
  • Experienced hands-on the tools that most aligned with your needs

All that’s left now is to sign the deal and start the onboarding of your team with your new freight sales software!

 

5. Evaluate your decision

 

After you’ve had time to integrate your new freight software, you’ll want to evaluate whether you made the right decision or not. This involves revisiting everything we’ve discussed thus far, and determining whether your tool of choice has:

  • Lived up to your expectations
  • Helped your team overcome their initial pain points
  • Positively impacted your team’s productivity and your company’s bottom line

Collect the input from your sales team, managers, and customers. There are several areas you should focus on:

  • Ease of use
  • Flexibility
  • Scalability
  • Communication
  • Cost

Ideally, your experience in all these areas should be positive. Realistically, there will be some issues, but if you are overall satisfied and ready to recommend this freight software to others – you made the right choice!

Sales Automation Software - Quotiss

ROI of Sales Automation Software in Freight Forwarding

In this article, we will look at the actual numbers: how much can you grow your business with sales automation software in freight forwarding?

 

At Quotiss, we talk a lot about how crucial it is to simplify the freight rate management in general. But we also emphasize the importance of automating every transactional sales activity to free up the time for actual selling.

Combining the two will help you boost the sales efforts and grow the bottom line, and there is data to support it.

It is also true, that you can grow your business without sales automation. But that doesn’t mean that you should. Why wouldn’t you make sure that every process in your company is optimized towards growing your business? Especially, that the competition is fierce.

 

ROI of Sales Automation

 

Return on Investment (ROI) is the benefit resulting from an investment. To calculate your ROI you need to know two things:

  1. How much you are investing
  2. How much you earn from it as a result

There are two main reasons why measuring the ROI of sales automation software matters:

  1. Automation of sales drives more sales
  2. Sales reps are often overworked, and investing in automation of their routine tasks can change that.

When it comes to sales automation software, money spent (or money that could be spent) is pretty easy to calculate. However, calculating an accurate number for money earned (or costs reduced) is much harder, because the software itself isn’t directly generating new income or making sales for the company. Therefore general sales automation ROI indicator basically isn’t possible – we need to look at a group of elements to see the full picture.

The core elements for financial return in the sales support teams are usually:

  • Time to prepare and send a freight quote (sales automation software means instant freight quotes)
  • Accuracy of a freight quote (sales automation software means 100% accuracy and no manual errors)
  • Follow up on deals (the software will automate the follow-up and save time and money on daily operations)

 

Great Customer Experience as a Bonus

 

Many people think that the only way to grow their business is to find new customers, but often, the best source for growth is the existing customers. And for them, the quality of sales support and customer service matters the most.

In research on actual customer transactions published in the Harvard Business Review, researchers studied thousands of customers and found out that customers who had the best past experiences spend 140% more compared to those who had the poorest past experience.

This means, that we can identify an additional element for the sales automation ROI: Customer satisfaction (sales automation software provides consistent excellence in customer experience)

 

The Dollar Value of Your ROI

 

It all boils down to making more profit from direct sales activities, once all transactional tasks are automated. More deals are closed-won as a result of the sales automation software implementation (the time freed up by automation is spent on actual selling).

Now that you have identified the metrics and factors that you can use to measure the impact of your software investments, you can calculate the actual ROI in USD. Click this link to open the Quotiss ROI calculator.

You can make it all work for your company. Investing in the right sales automation software you make sure that your sales people are delighted to work with you, your customers have a better experience and it also serves your company’s financial goals.

 

Quick-Start with Sales Automation – Quotiss Software

 

Click here to register your company online. We’ll activate your company’s profile and help with the initial settings and user onboarding. You can start uploading your freight ratesheets and quoting freight instantly from Quotiss on the same day we sign the deal.

Quotiss Software

Quotiss Success Story – 3 Years Anniversary

January 26, 2017, is the official birthday of Quotiss and the starting point of our exciting journey as a company! On this day, we’d like to share our story of how it all began, starting from ‘the big idea’ which became our mission and brand philosophy.

 

Marcin Zarzecki, CEO of Quotiss:

“Container shipping is one of the most important industries in the world, connecting markets and making the world smaller and the economy bigger. Ever since I joined Maersk Line in 2003 as a management trainee, I was fascinated by this business. I changed many departments and worked in many countries, from Poland to Kenya, to Belgium and India. The job was very rewarding, but at times frustrating – the tools and the business procedures that we’ve got were far from being optimal. There had to be a better way.”

 

Margarita Tokareva, COO of Quotiss:

“I spent 10 years working for Maersk Line in different countries (Italy, Spain, Russia, India). My focus was on process improvement in sales, mainly on performance optimization and software implementation projects. In 2015 I participated in the project with the aim to simplify and automate quoting to customers together with Marcin. We’ve been brainstorming and we realized that there is a simple and smart way to simplify the rate management in container shipping, Not just for one specific shipping line, but for any company out there on the container shipping market.”

The big idea got stuck – a smart and simple software solution that will automate freight rates in container shipping.

 

From Container Shipping to Software

 

It took about a year to nurture the idea and make sure that it makes sense. A lot of brainstorming was needed to develop a clear vision of what it could be like, look like, and feel like. But having a vision and a plan is not enough, and in order to move on, we had to start acting upon it.

The first steps included a lot of learning. We met a lot of like-minded people, potential investors, ‘business angels’, and mentors and learned so much about being an entrepreneur.

It became clear that we need a partner who will take care of the IT side of the project – that’s when Michal Polak joined us as a co-founder.

Michal Polak, CTO of Quotiss:

“I joined Marcin and Margarita in the summer of 2016. I liked their big idea, but to be honest I was shocked and couldn’t believe that such a giant industry operates on Excel ratesheets. I accepted the challenge, and it took me a few weeks to prepare a very simple software prototype, which was good enough to demonstrate to the potential clients and get the initial market feedback. Marcin showed the prototype to a number of clients – and there was a clear interest in the market. It was a green light to start the software development full speed ahead. We felt very excited and inspired!”

 

 

Quotiss on the Software Market

 

We took the practical approach – we listened to our clients. Based on their feedback, we planned new features development, product improvements, and set priorities.  It was a very long process of making sure we get it right.

Customer satisfaction is very important for our business. Clients do appreciate constant care and quick response to their requests. Also, they often come up with improvement ideas themselves and we usually react very fast.

By now, our client base covers large geography: freight forwarders from Poland, Lithuania, Russia, Italy, Switzerland, Romania, and China use Quotiss to manage freight rates and freight quotes.

 

Why Quotiss?

 

The name Quotiss combines the word ‘Quote’ (a verb used in shipping which means ‘to prepare a commercial offer to a client’) and ‘ISS’, which comes from the KISS Principle (Keep It Smart and Simple). It perfectly describes what the software does – it prepares freight quotes in a smart and simple way!

 

What’s Next?

 

Behind every business, there is a lot of hard work. In order to stay afloat, one has to constantly improve the service and the product. We have ambitious plans for 2019 – new software modules are coming soon and the growth pace is up.

Our clients are the best motivators for us. They use our software on a regular basis, sending hundreds of quotes daily. It makes us proud!

freight ratesheets quotiss

The Art of Spreadsheeting: How to Complicate Freight Ratesheets? (Part 2)

by Marcin Zarzecki, CEO of Quotiss

This is the second part of the article, which covers the numerous errors in freight ratesheets distributed by the shipping lines. In the first article, I illustrated that there is a clear lack of unified standards across the carriers. Even within the same shipping company different offices use different formats when it comes to preparation and distribution of the freight ratesheets.

In this post, I will dig deeper into the discrepancies we’ve witnessed during our freight simplification journey at Quotiss. I will not give the names of the carriers for obvious reasons, but I can assure you that there is no single carrier in the world that has their rates structured to the optimal level.

So far, we’ve covered the most common discrepancies:

  • Rate structure

  • Delivery method

  • Local exceptions

Now let’s look at other examples when things go bad because of the lack of standardization and proper tools.

 

Inconsistency in Location Names

 

 Shanghai is one of the biggest ports in China and in the whole of Far East Asia. Shanghai port is included in the rotation of all major shipping lines.

When you look for Shanghai in a freight ratesheet, you can see the following variations of its name: “Shanghai”, “Shanghai, CN”, “Shanghai, China”, “CNSGH”, “CNSHA” or even “China Main Ports” which sometimes is shortened to ‘CMP’ or ‘ECMP’ (for East China). These names are not commonly provided as a standard unified code (UNLOCODE).

The same carrier can use different abbreviations for the same port. We also witnessed the situation, where the carrier had one set of NCMP (North China Main Ports) in one contract and another set of NCMP in the other contract. Both contracts were sent to the same freight forwarder within the same week!

 

Inconsistency in Freight Surcharges

 

Freight rates consist of basic freight (BAS) and freight surcharges. Some freight surcharges are already included into BAS and some are excluded (quoted separately). There is no regulation of including or excluding freight surcharges and it can vary across the same carrier contract.

For example, in week 1, the bunker surcharge can be included in the basic freight rate. In week 2, the bunker surcharge is given as a separate freight surcharge. In week 3, the bunker surcharge is again included into the basic freight rate. This is common practice.

Obviously, there is no unified naming convention for the surcharges. For example, bunker surcharge can be abbreviated as BAF, SBF, or BUC. Low sulfur surcharge can be called LSS, LSF, or ECA – depending on the carrier you use.

 

Inconsistency in the Outport Rates

 

Many shipping lines provide the main port rates and attach a separate table with the outport additionals. For example, BAS for Shanghai – Hamburg is 1000 USD / FFE, and Hong Kong is 50 USD / FFE on top of Shanghai, which means that BAS for Hong Kong – Hamburg is 1050 USD / FFE. When Shanghai – Hamburg rate changes, Hong Kong additional remains the same – 50 USD / FFE on top of Shanghai. This is a relatively easy way to present the rates, as statistically, main port rates change more often, than outport additionals. This makes a lot of sense, and it saves time and resources on the rate reprocessing.

But we’ve seen freight ratesheets with all-in main port rates and a separate page with all-in rates for the outports. There is no logical commercial explanation for this – just a clear lack of proper tools.

 

Consequences

 

All these inconsistencies are both the cause and effect of the broken shipping process. They make it impossible to digitize pricing and bring the quoting online.

  • Shipping lines waste time and resources on sending bulky freight ratesheets and struggle with invoice quality, losing millions on internal inefficiencies;
  • Freight forwarders receive hundreds of freight ratesheets in unstructured and inconsistent formats, waste their time processing the data and struggle with the invoice quality;
  • Shippers wait for freight quotes for hours and deal with the inconsistencies in the formats.

Some industry players vote against displaying freight rates online, as it may start the price wars and drive the margins down. Commercially valid reason. But still, there is no logical explanation for the mess in the pricing of the shipping lines.

What about the freight marketplace, where a client can compare the rates of different carriers and book his freight online automatically with the selected provider? What about digital freight forwarders, who promise a fully automated service from A to Z?

Any automation must start with the standardization. In the case of container shipping, it must start with the simplification.

We believe that until all shipping lines agree to use the same port naming convention, unify trade and port surcharge structure, and agree on the way the rates are presented and distributed to the client, it will be very difficult to build a platform to compare shipping rates online.

Once the pricing is simplified, the quoting can be dramatically improved, as we do it in Quotiss.

Click here to register online. We’ll activate your company’s profile and help with the initial settings and user onboarding. You can start uploading your freight ratesheets and quoting freight instantly on the same day we sign the deal.

freight ratesheets quotiss

The Art of Spreadsheeting: How to Complicate Freight Ratesheets? (Part 1)

by Marcin Zarzecki, CEO of Quotiss

There are many good things one can say about container shipping and its global impact on the world economy. But shipping lines are also very well known for sending very complex and unstructured freight ratesheets. During my time in Maersk, where I spent over 10 years in the sales function, I was often struggling with the challenges of the pricing and quoting policies, despite Maersk being one of the most advanced carriers and the global leader in this aspect.

One of the reasons why I started Quotiss 2 years ago was to simplify ocean tariff management. By this time, we have collected a lot of data.

By now, I have seen thousands of freight ratesheets from various shipping lines, and I had time to analyze their structure very thoroughly. Conclusions are surprising and not too cheerful: this tremendous complexity comes from the internal inefficiencies and ‘broken’ processes of the shipping lines themselves.

 

The Data

The analysis is based on the data collected from the ocean tariffs that are uploaded into the Quotiss software by freight forwarders. The data has a healthy mix of various parameters:

–         Freight forwarders who use Quotiss software work with most of the major shipping lines – we studied the specific rate formats of all major ocean carriers;

–        Freight forwarders who use Quotiss software come from different parts of the world – we studied the differences in the rate format based on the specific country/office which prepared the rate sheet;

–        Freight forwarders who use Quotiss software work with shippers in different industries – we studied the differences in the NAC / special freight rates/exceptions format.

The Analysis

 

Let’s look at Far East Asia – Europe ratesheet generated by one of the major shipping lines.

1.      The structure

This rate sheet contains 15 000 port pairs, 109 000 lines with rates and surcharges, 545 000 unique rates for all equipment types. It is 500 000+ unique rates in a single freight ratesheet for just one trade/direction, with the validity of 2 weeks maximum.

 

2.      The delivery method

This freight ratesheet has been emailed to a freight forwarder as Excel file in attachment. Freight rates on the Asia-Europe corridor change very often, sometimes even a couple of times per week. Let’s assume, the average update frequency is weekly. This means, that every week, a bulk load of freight ratesheets with half a million rates each is generated and sent by email to hundreds of freight forwarders globally.

That is 500 MILLION unique freight rates that are being updated and distributed on the market, all by just one shipping line on one trade/direction.

 

3.      Local specifics

Everyone in the industry knows that different shipping lines send their freight ratesheets in different formats, like .xls, .pdf, or just copy-paste Excel table to the email body. But only a few people know that even within the same shipping line, different offices might use different templates and formats. Sometimes, even within the same office, salespeople send freight rates in different formats.

These format discrepancies within one company usually come from the big list of exceptions that are specific to the country/port.

There is a clear lack of the unified standard across the ocean carriers, which comes from the lack of standard software solutions that would be capable to cater for the giant list of local exceptions in an automated way.

 

The Conclusion

 

The saddest part is that over 99% of contents inside these freight ratesheets will never be used by anyone. Statistically, almost all cargo traffic on Far East Asia – Europe trade lane is generated by 20% of ports. Pareto Rule works for all trades in ocean shipping.

There is a lot of waste in the process. Shipping lines realize this waste and work hard to improve the quoting process by trial and error, implementing various custom-made software solutions. But improving the ‘spreadsheeting’ is like putting lipstick on the pig – doesn’t make it any more pretty.

 

The Solution

 

Is there any solution to bulky freight ratesheets? There is an obvious and logical one: for the real change to happen in container shipping, ocean carriers have to simplify and unify their pricing structure across all offices/trades.

Once the pricing is simplified, the quoting can be dramatically improved, as we do it in Quotiss. In my next post, I will dig deeper into the most common errors which we see in the freight ratesheets.

Logistics Software

The Dollar Value of Logistics Software

What is the exact dollar value of the logistics software? Every freight forwarder knows that the logistics business is mostly driven by price. In such a competitive market, any opportunity to improve profit margins should not be missed.

Technology can significantly improve efficiencies internally, resulting in greater profitability. These improvements mostly come from the reduction of manual processes –  time-consuming and error-prone. For example, automating the process of searching and aggregating freight rates can save at least 30% of the sales reps’ time.

But what is the exact dollar value of technology for a freight forwarder? And more importantly, how to calculate the extra profit margins it can help generate? You will find a very simple online calculator at the end of this article.

But first, let’s look at the areas where digitization can help the most.

 

Logistics Software Brings Transparency

 

Traditionally, the sales teams in freight forwarding companies would have to rely on multiple Excel tables with rates, surcharges, and special conditions, preparing freight quotes manually. This is far from optimal, as the margin of error is too high.

Now, when the freight rates change so often, the value of having all commercial data on one platform in a structured way is essential to maintain the sanity and transparency.

 

Logistics Software Makes It Easier

 

Get rid of the large Excel freight ratesheets, put your commercial data on one platform in a simple and transparent way. This will simplify your sales and procurement workflow.

Simplification and automation provide infinite possibilities and allows you to upload freight tariffs and make freight quotes in a few clicks.

 

Logistics Software Brings Security

 

Security and confidentiality are very important when attempting to forge business relationships. With advances in technology come advances in data privacy.

In Quotiss, we made it our top priority to provide the highest level of data security to our clients. We use AWS cloud servers – the technology which is trusted by the largest businesses across the globe: Siemens, Vodafone, Philips, General Electric, and others. With daily database backups, digital safety is 100% guaranteed.

 

Logistics Software Brings Savings

 

A computer can carry out tasks in seconds and with 100% accuracy. One of the greatest benefits of implementing technology into the commercial business process is time-saving and cost reduction.

In Quotiss, your latest freight rates and your most precise client database are integrated into one platform. Contract management simplification allows you to automate and track the freight quotes.

Not only can this reduce the risk of error and raise the quality standard, but also save you great amounts of active sales time. Such time saving opens new doors for using sales talents in ways that will generate more profit at the end of the day.

How much more? Use our simple online ROI calculator and get your estimate in USD.

Quotiss freight forwarding software

Quotiss Helps Freight Forwarders Go Digital

Freight forwarding is one of the largest and most important industries in the world, but also very traditional and least digitized. Quotiss helps traditional freight forwarding companies become digital. We believe, that any freight forwarder can become digital with the right set of digital tools.

Container shipping is one of the least digitized segments of all transport services. Managing freight tariffs is a well known technical challenge, which keeps some freight forwarders stuck in the era of MS Excel.

 

Digital Freight Forwarders

 

There are many startups who try to revolutionize the ‘ancient’ industry. Business models like ‘freight marketplace’ and ‘digital freight forwarder’ are funded with millions of dollars. The frequently asked question is whether the freight forwarders will be replaced with these online services in the near future or not.

Freight forwarding looks like a perfect industry for disruption! A cohort of digital freight forwarders and freight marketplaces emerged on the market. Their value proposition can be summarized as Booking.com for shipping. And yet, today in 2018, it is still hardly possible to find and compare freight rates online. Although some digital freight platforms enable online bookings, there is still a lot of manual work behind the digital interface.

It’s never been easy to deal with freight, due to the freight rate complexity and volatility. Looking at the whole end to end process, it seems logical that transportation price consists of multiple components because the cargo literally travels half of the globe one way. Adding all transportation costs into the picture (door delivery, customs, port expenses), makes ALL-IN freight rate calculation a very complicated process.

For decades, freight forwarders take care of complex logistics and supply chain management. They have connections to the suppliers, agents, customs, and they take care of the entire shipment process, including that cargo insurance. The human factor plays a big role in this mostly relationship-driven business.

 

How to Digitize Freight Rates?

 

Freight forwarders get access to more and more digital tools each year. There is a big interest in digitizing the customer interface: offer online freight quotes, online bookings, online tracking, etc. All these customer-facing digital initiatives are very necessary, but hardly possible without digitizing the back office of the freight forwarder.

It’s not possible to offer online freight quotes if your selling rates are maintained in Excel. You run a big risk of low data accuracy, which can cause financial loss and/or reputational risks.

It is necessary to start from the basics – automate and digitize your freight rate management internally, and after that integrate your automated freight quotes online. Nevertheless, the technology which helps streamline complex logistics processes is already there: electronic communication, big data analysis, transport management systems, etc.

Early adopters are already enjoying the benefits: becoming faster, more flexible, and cost-efficient. There is a visible pressure from the digitized forwarders towards their traditional competitors. It’s becoming obvious, that a “regular” forwarder will soon need to find ways to be on par with the digital world.

Sales Automation Software for Logistics

 

Marcin Zarzecki, CEO of Quotiss says:
“Complex contracts, massive ratesheets, thousands of emails, Excels and PDFs bring frustration, consume resources, and destroy efficiency. At Quotiss, we found a solution that brings structure and simplicity.”

Quotiss has united a team of industry professionals and became a successful startup supported by Techstars Ventures and Google for Entrepreneurs.

Quotiss software could be the right solution to digitize freight ratesheets using a simplified upload mechanism. Quotiss is a practical tool, which automates all kinds of freight ratesheets in a smart and simple way. All freight rates from all suppliers in one place, available instantly to everyone in the organization.

Once the carriers’ contracts are simplified and uploaded into the system, the quoting process becomes fully automated. Having all commercial data on one platform, freight forwarders can enjoy full transparency: archive of freight rates and quotes, profitability, the efficiency of sales teams in real-time. No more searching through multiple folders, excel files and emails.

“Modern technology used to be available only for big players with massive resources. But this is changing. Medium and small-sized forwarders start adopting instruments like Quotiss and, thus, learn to compete with efficiency and not just the rate.” – says Eugene Reznikov, Quotiss representative in Hong Kong.

With Quotiss, you can increase your sales productivity without increasing headcount. When your business is driven by efficiency, it directly impacts the company’s bottom line.

 

Would You Like a Quick Start with Quotiss?

 

Click here to register your company. We’ll activate your company’s profile and help with the initial settings and user onboarding. You can start uploading your freight ratesheets and quoting freight from Quotiss on the same day we sign the deal.