Book and Payment Experience Global Logistics Transformation

For shipping, logistics, for the middle mile down to the last mile, we might say there were two eras – BP and AP – before the pandemic and after the pandemic.

shipments Executive Director Zvi Schreiber He told Karen Webster in an interview that prior to 2020, he said of the $20 trillion industry: “A lot of people probably didn’t know what a supply chain is.” “Until it broke.”

The supply chain is, of course, behind the scenes and an integral part of everything we buy, buy and make. Look at the T-shirt on your back and 90% of the materials and labor that were laid out on the shelves at your local store or via e-commerce channels may have originated outside of the home.

At the heart of it all lies pricing, which relies on transparency and predictability.

Until the advent of COVID-19, supply chains were running smoothly for the most part. Speed ​​bumps came mainly from strikes or bad weather (sometimes natural disasters).

Now, he said, with wars and climate change, and as the pandemic has shown, the nature of shipping is making the stock market look stable.

When the actual movement of commodities is offset, prices become volatile and even fade away. And that’s what we’ve seen, more importantly, in the past few years, as peak prices impacted air and sea freight, driving up prices paid across all kinds of business relationships (and eventually, higher costs affecting consumers as well).

See also: Cargo platforms float on land, sea and air

Freightos’ own data shows this volatility: spot market prices rose 10x compared to pre-pandemic rates and then declined amid overall pressures. Small changes in demand can lead to large shifts in prices.

Online mobile pricing

shipmentsThe company, which has been in operation for eight years, has been busy transmitting prices online to the massive international shipping system to help stakeholders discover prices and thus make real-time decisions on reservations, reflecting the rapidly changing dynamics of supply and demand.

There is an urgent need for more transparency in pricing in an industry where surprisingly many activities are done offline. Schreiber has indicated his displeasure with his previous roles running an import company years ago due to the lack of dedicated platforms for price comparisons and freight booking. This scarcity stands in stark contrast to the fact that consumer-centric websites offering comparison shopping and transparency have been around for decades.

But Schreiber said that when developing robust digital channels for pricing and booking, it should be noted that logistics are dynamic.

There is little disparity with respect to which sectors have been more modernized than others in terms of technology.

Air freight has been faster in embracing digitization—than ocean freight companies, he told Webster. For example, Lufthansa began making use of APIs years ago to improve and simplify data flows to speed up and even automate pricing and reservation activities.

This made it possible to convert passenger flights into cargo flights, with the demand for the former declining in light of the epidemic and the increase in demand for the latter. There is still room for improvement – today, about 40% of airlines use platforms (Freightos among them) to improve logistics operations, although it was stated that airline-related bookings via the Freightos platform have increased 100-fold since the beginning of 2020.

“Containerized ocean ships are starting to go online, too,” Schreiber noted, with a plethora of information still linked to Excel spreadsheets.

It turns out that there are different levels of urgency in how “real time” pricing information is, depending on the mode of transmission. Delays between booking and when ships sail can take several days or weeks – so waiting a day or two to receive quotes can be frustrating but it doesn’t change the economics of the activity itself.

See also: Fritos’ filings showcased platforms’ position in the digital transformation of logistics

There’s some friction in the mix, as bookers and ocean liners have positioned themselves along regional lines, with teams in place sticking tightly to those regions and the above spreadsheets. Right now, getting them to stick to one website is an obstacle as anyone in the world can probably book and pay for freight transportation.

But this trend is ruthless.

As Schreiber notes, “it’s the companies that don’t have automation and digital connectivity that will lose out.”

The same data used for price discovery and booking can (and should) also be associated with the payments themselves. He said transactions are another area where the platform model shines.

Payment obligations can change quickly depending on external factors, for example the weather, or if the weight of the actual shipment changes.

As Schreiber said, “The key is to be able to book and pay — and settle those payments — in one place.” Ease of payments is a boon, especially for financial managers, who want to quickly agree payment terms (30/60/90 days) and see what different foreign exchange rates mean for the company’s bottom line.

To that end, he said, Freightos’ Web Cargo offering, on the same web page where stakeholders search, book and prepay through digital wallets, in some cases, get credit terms. This streamlined process is a lifeline for the thousands of smaller freight forwarders who operate and need democratic access to airlines and other entities.

“Payment terms can help with cash flow significantly,” he noted.

I look ahead

By 2025, these structural changes will become more entrenched in logistics as real-time payments become more prevalent, especially with FedNow. Schreiber said RTP is a game-changer – eliminating middlemen and reducing reliance on cash to move goods. “It’s a digital way to do the same operations, but in a much faster way.”

We are always looking for opportunities to partner with innovators and opponents.

learn more

Leave a Reply

Your email address will not be published. Required fields are marked *