According to a survey by Container xChange, the online platform for container logistics and operations, the challenges of digital adoption leading to a lack of transparency, visibility and trust emerge as the three main struggles for container logistics companies when booking shipper-owned containers out.
To examine the pain points of the current state of ocean freight booking, Container xChange teamed up with Copenhagen Business School and surveyed 137 shippers and NVOCCs around the world.
While the majority of carriers, shippers and NVOCCs use online quoting solutions, 83% see the need for better digital infrastructure in the future, citing digital ship schedules and intuitive booking interfaces as the most impactful digital transformations in the coming period.
Christian Roeloffs, co-founder and CEO of Container xChange, shared: “Lack of transparency and standardized digital processes have long led to inefficiency and distrust in the logistics industry. These struggles are even worse for containers owned by shippers where no carrier takes care of the processes. This hinders the introduction of SOCs in the market. The survey confirms the current state of the industry, but it is encouraging to understand how many players are looking forward to digital ship schedules and an intuitive booking interface, for example.”
“With the advent of digital tools, all of this could be streamlined so that there is one standardized process for all users. As digitization is at the heart of the entire booking cycle, the industry could become more efficient with optimized vessel schedules, intuitive booking processes, avoid scammers and gain trust in counterparties with verified partners.” Roeloffs added.
In principle, shipper-owned containers offer more flexibility compared to carrier-owned containers and can help users to avoid high fees such as demurrage and downtime. However, the market has yet to fully embrace SOCs in the same way as COCs when it comes to digital solutions. SOCs are a fairly new concept, lack digitized slot booking processes and have a great opportunity to connect with the fragmented ocean freight market.
When it comes to booking slots for ocean freight, shipper-owned container users struggle more to get accurate quotes and confirmations of available capacity and end up booking with 5-10 shipping or feeder lines due to lack of schedule reliability . While carrier-owned container users have the freedom to take care of administrative tasks like trucking, offloading, unpacking, etc., and have digitized slot booking solutions, many players still carry out the process manually using lots of emails and phones Calls.
The main results of the survey were:
- More than 70% of respondents find a lack of trust in their counterpart
Of all the companies surveyed, 83% of them rated digital ship schedules as an importance level of 4 or 5, while 77% rated the intuitive booking interface the same way. But industry players also want their document checklist and uploads visible and easy to use, as well as operational contact information at hand.
- We found that 84% of our participants still get quotes via email and phone, while 78% of them use the same outdated processes to make a booking.
- At the same time, the fact that 60% also use online quotation solutions such as the shipping companies’ online booking interface (e.g. Maersk’s platform) shows that a market for digital SOC sea freight booking exists.
The sea freight market is still moving in old ways with slow manual processes. In order to receive offers and bookings, the industry still struggles with quick and easy processes. Outdated and manual processes remain prevalent as companies still take bookings via email and phone.
Instant bookings and capacity confirmations were considered the most important for the slot booking process. And yet, many players are not satisfied with the service they receive.
Adrian Degode, Senior Product Engineer, at Container xChange, who is working on digital solutions to streamline industry vulnerabilities, said: “The shipping industry is becoming increasingly digital, but the key thing missing is trust. The caveat remains to bring all solutions together on one platform that simplifies the ocean freight spot booking lifecycle while maintaining trust and transparency.”
“To bring an end-to-end solution to the industry, Container xChange is building a dynamic ocean freight marketplace with transparent rates and trusted partners for shipper-owned containers, where users receive guaranteed slots on the vessel and supplier-guaranteed payments . From querying up-to-date ship schedules and freight rates for your shipping routes to selecting and booking the best deal from trusted partners in minutes, the platform offers a wide range of features,” he added.