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Shipping prices are just another snag in the supply chain. Here’s how ‘benchmarking’ platforms are helping companies cut costs.
Shipping prices can be volatile. Tech companies are trying to streamline how companies evaluate rates. If you’re a retailer importing merchandise, COVID-19 was likely your worst nemesis. The disruption brought on by the pandemic saw bottlenecks across supply chains that continue to persist, as shippers and retailers fight to ensure reliability in their sourcing operations mired with product shortages and delivery delays.
But supply volatility isn’t the only headache retailers have to contend with today. For instance, ocean-shipping prices between China and the US quadrupled from their prepandemic rate at the peak of freight-capacity demand late last year, according to data compiled by freight-rate benchmarking platform Xeneta. Today, Xeneta reports, it’s settled at roughly three times the value of what it was two years ago — still an outrageously high number. Cutting down on the time brands spend evaluating rates
German footwear brand PUMA turned to Xeneta in 2019 after facing its own challenges finding capacity and locking down rates. “It was a hard time during the pandemic. Rates were going up, available transport capacity was getting tight, and procurement was a pain,” Peter Stockhammer, the senior team head of global logistics procurement at PUMA, told Insider.
Stockhammer said PUMA was able to prioritize a few transport partners and choose the best fit for its freight from the list of options Xeneta provides, cutting down the effort needed to build a freight benchmark every time it needed to ship products.
“There was no actual freight benchmarking before. You could only obtain rates by inviting multiple parties to bid on your freight tender. This meant talking with many individual providers just to pick one party at the end — wasting our time and the time of several service providers,” Stockhammer said. The lack of visibility and excessive dialogue involved in this hands-on process goes further than just freight rates, with challenges like complex import procedures, abiding by extracting compliance rules, and filling out excessive paperwork.