The hallmark of a functioning market is information flow, empowering buyers with the knowledge to make a smart choice while enabling sellers to selectively differentiate and compete. But data transparency within the logistics industry is lacking at best.
Take a look at the range in carrier prices for forwarders along one the world’s busiest routes (Shanghai to Long Beach, CA), in a data snapshot from mid-December 2016. For top twenty carriers, the price range varied by over 30%. This wasn’t the result of deliberate price discrimination either; the higher prices were not correlated with bigger customers.
In plain English, that means that forwarders and shippers do not know what they should be paying. When someone buys a car, they compare prices, with most prices settling at the nexus of supply and demand, and make an educated decision based on value and cost. In freight, supply and demand can take years to synchronize. For the most part, these costs are simply passed on to the less sophisticated forwarders and shippers.