Shipping Container & Sea Freight Cost Optimisation Specialists
The current scale of global goods being imported and exported around the world is entirely reliant on international shipping and sea freight. Without it, the current level of demand and economic pressures would not be able to survive. Being dependent upon such an important service to the global economy, it is vital for organisations dependent upon international shipping and sea freight to pro-actively manage their costs, utilising effective optimisation services to ensure their business is protected for the future, whilst also giving them greater financial flexibility to achieve their long term goals.
Opportunities for your Business
With a significant proportion of global trade making its way around the world via the international shipping and freight suppliers, businesses face a continually changing landscape of challenges, impacted by both economic and political factors all of which can have a profound effect on their profitability and ultimate success. Despite these challenges, there are also significant opportunities for companies, particularly those embracing growing technologies and dedicating resource to identifying areas which are inefficient and taking a global approach to their supply chain and communication infrastructure.
Not all companies will face the same challenges but below are a number of common issues being faced by businesses within the shipping and freight sector. The scale and impact of these challenges can vary, but by taking a pro-active approach of continuous improvement, you can minimise risk and protect your business.
- Pressure to reduce carbon emissions
- Changing legislation such as Maritime Carbon Compliance
- Increased port congestion
- Exposure to fuel price changes
- Currency fluctuations
- Political tensions
To learn more about these challenges and others facing the shipping and freight sector, ERA has a global team of experts that are available for you. Get in touch with us in order to learn more about how we can assist you in alleviating your specific challenges.
"The container sector is notoriously conservative, and many established companies have not embraced digitalization. As a result, this frequently results in multiple non-connected systems being used to manage single shipments, including duplicated data entry which increases the likelihood of errors and data being lost during transit."
At Expense Reduction Analysts, our freight and shipping specialists take a holistic view of your business, conducting detailed audits and analysis to provide a range of effective solutions designed to help optimise your business and maximise your operating efficiencies.
By taking a pro-active approach, we can help you protect the future success of your organisation.
- Direct Cost Optimization: Making a detailed analysis of your annual spend pattern and seasonality’s can be a daunting but necessary task to obtain the best prices and terms in your freight procurement. In addition you need to identify and select the right suppliers from the myriad available. Finally, you also need to have good insight into the available services in the market and what impact the services have on your price.
- Go-To-Market Strategy: Doing a review can be an important part of your supply chain and financial risk management, helping to give you transparency of areas which are not performing well.
- Invoice Control / Freight Audit: o It can be time consuming to check all invoices against agreed prices, especially with a number of surcharges, of which some are changing on a regular basis. The complexity also result in invoicing errors by the suppliers. It can be costly for you to not validate the invoice amounts before paying invoices.
- Currency Optimization: A container sea freight transport usually consists of both land-side and ocean related costs. Land-side costs are often quoted and invoiced in local currency where as ocean related costs are typically quoted in either EUR or USD. Often these charges are invoiced in local currency with a supplier adding a rate of exchange margin as a risk mitigation measure. We can analyse your exposure and ensure you’re protected as much as possible.
- Managed Procurement: Frequent and significant price fluctuations in the market can make it very time consuming for you to ensure you have competitive pricing, not to mention the challenge of achieving price transparency or knowing if the received prices are competitive. Asking 2-5 suppliers is not enough to gain assurance but our specialists can provide you with resource and confidence.
- Price Calculator: Larger companies often have more than one supplier, especially within a particular lane, with added complexity when a promised share of shipments is included. This can lead to a lack of transparency making it difficult for you to decide which supplier to use and when.
- Bunker Sensitivity Analysis / Model: Each shipping line has their own bunker surcharge formula. If you’re using multiple suppliers in the same lane, price variations can occur due to changes in oil prices.
- Digitalization: The container industry is notoriously conservative with very little digitalization. This frequently results in multiple, non-connected systems being used to manage single shipments, duplicated data entry via manual processes and data loss during transmission.
- Incoterms® Review: Using the wrong Incoterms® or misunderstanding the Incoterms® can lead to significant losses, including complete loss of cargo value and associated lost sales.
The Value of Technology
Technology represents a huge area of opportunity for companies operating within International Shipping and Freight. As connectivity is improving, the variety of tools which can become connected and start communicating continues to grow. This “Internet of Things” can deliver improved efficiencies, better safety and security as well as improved cost effectiveness.
However, typically speaking the container industry is notoriously conservative, and many established companies have not embraced digitalisation. As a result, this frequently results in multiple non-connected systems being used to manage single shipments, including duplicated data entry which increases the likelihood of errors and data being lost during transit. And makes the audit and control of shipping costs very complex and time consuming.
Download our full white paper today which examines the opportunities offered by technology and digitalisation and steps you can take to use these tools for a competitive advantage.