Navigating the Waves: Exploring Digital Booking in Ocean Logistics at TPM 2024

Judah Levine

The sessions at this year’s TPM, the preeminent North American ocean freight conference, were more focused on the role of technology in ocean logistics than ever.

One panel – moderated by JOC’s Tech Editor, Eric Johnson and comprised Kai Timmermann, COO of Prompt Global a supply chain management platform for forwarders, Panadda White, Director of Logistics for Fiji Water and Zvi Schreiber, Freightos CEO – was to explore whether technology that enables digital ocean freight bookings ,or “eBookings” between shippers and carriers could lead to the disintermediation of freight forwarders. But the discussion quickly turned to exploring why – given the marked shift to eBookings in air cargo – does the prevalence of eBookings in ocean logistics still lag so far behind?

Revisiting Booking Channels: The Digital Frontier

It began with an age-old debate topic in the era of transformation: What functions should be done in-house and why? 

White opened by explaining that for some BCOs, like Fiji Water, ocean needs are fairly straightforward: they move containers from a single origin, and making bookings directly with carriers can simplify their logistics operations process by reducing the number of people that need to be involved. Doing it in-house means more control, and so from a BCO perspective the decision to handle bookings internally can, in addition to the aim of simplifying, also be a function of how much control you want to have over your ocean logistics. 

Timmermann, formerly of Toll Group, pointed out that BCOs mostly still prefer to use forwarders because of the complexity of ocean logistics: forwarders serve as problem solvers when things like canceled sailings, rolled containers, or price adjustments of just the ocean move occur. And forwarders also add value in orchestrating many of the other moving parts like first and last mile, warehousing, customs and insurance.

But digitization doesn’t need to dictate the players who are involved; after all, many organizations with multiple players in complex interactions – like banking – are already digitized. 

In that vein, Schreiber commented that most BCOs still don’t make their ocean bookings themselves – whether with a carrier or a forwarder – because it is still largely a manual, complicated, offline process.  The real issue isn’t whether or not the BCO is making the booking directly with the carrier, but why – whether BCO to carrier, BCO to forwarder or forwarder to carrier – the bookings are still largely handled offline?  

Even BCOs or forwarders who make electronic bookings with carriers are doing so mostly through INTTRA, an older solution that was cutting edge at its launch but is still quite manual, functioning more as an ocean-container specific email, in which a booking request is sent to a carrier to be reviewed and approved by a human being.

“I actually can’t believe that after twelve years I’m still talking about this.” – Zvi Schreiber, CEO, Freightos Group

A true ocean freight eBooking instantly locks in a confirmed rate against actual capacity on a specific sailing, and these, much to Schreiber’s frustration, currently are the large minority of ocean bookings.

Ocean eBookings Versus Air Cargo: A Tale of Two Modes

The revolution toward real-time digital booking against actual capacity in air cargo stands in stark contrast to that of digital ocean booking.

The WebCargo by Freightos booking platform, which saw only modest activity as recently as early 2020, surpassed one million annual transactions in 2023, the vast majority of them for air shipments. The platform has seen rapid growth not only in the number of eBookings made by forwarders with carriers, but also in the number of airlines making their capacity bookable on the platform, which now stands at more than forty five.  Airlines representing more than 60% of global air capacity are now available on third party booking platforms, compared to only 14% at the end of 2020.  

So the technology is there, and both air carriers and forwarders using it for air cargo overwhelmingly see benefits in the speed and efficiency that real-time rates and low touch transactions provide. 

The data shows this too.

A Freightos report from 2022 found that more than 40% of the largest ocean carriers report having eBooking capabilities for spot shipments booked via their website, and more carriers are taking steps to promote digital bookings through their corporate websites. Though these and other indications show progress is being made through some carriers’ individual portals, less than 20% of carriers enable eBookings via API or on third party platforms. So why does there seem to be hesitancy among ocean carriers for a more meaningful shift to eBookings?

Navigating the Swells: Overcoming Barriers to True eBooking

It might be related to how carriers dictate pricing. 

Timmermann posited that ocean carriers’ approach to yield management drives their behavior and ultimately undermines a shift to eBooking: carriers are motivated to move the containers that will yield the most revenue, which means that prices quoted for bookings are not always the final cost to shippers and the expected sailing date or vessel for a given container can remain in flux. This approach can often be in conflict with eBookings that aim to secure space on a specific sailing at an exact price.  

Schreiber pointed to the prevalence of invoice auditing in ocean freight as an indication that prices are often not locked in, and ultimately adds costs for carriers and shippers in the form of the need for reconciliation after the fact.

Ultimately, the panelists were in agreement that, as in air cargo, the availability of eBooking is not likely to eliminate the role of freight forwarders. More so, they agreed that a far  bigger question is when the attitudes and considerations among ocean carriers that are holding back the shift to ocean eBooking will change.

Judah Levine

Head of Research, Freightos Group

Judah is an experienced market research manager, using data-driven analytics to deliver market-based insights. Judah produces the Freightos Group’s FBX Weekly Freight Update and other research on what’s happening in the industry from shipper behaviors to the latest in logistics technology and digitization.

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