The document discusses the importance of port-to-port rates in ocean shipping, emphasizing the need for companies to analyze these rates for potential cost savings. It highlights the volatility of pricing during the carriage-leg and encourages businesses to consider the pre-carriage and on-carriage phases for additional opportunities. Additionally, the document advocates using real-time data for better market intelligence to aid logistics decisions.

1. Why Port-to-port Rates Really Matter

2. Join The Conversation
On Twitter
@XENETA_AS

3. About
Xeneta
Container Freight Pricing
Transparency With One Platform In
Real Time & On Demand.

4. Are You Paying The
Right Container Freight
Rates?
Discover Savings
Potential In Real
Time.
Contact Us.

5. In today’s business environment,
companies are continuously looking for
ways to reduce logistics costs but in
order to identify potential cost savings,
companies need to do their homework
and utilize analytical tools to ensure
they’re securing the most favorable
freight rates.

6. While businesses may actually think that
they have optimized rates by only focusing
on door to door rates, they often fail to
realize that they may be missing out on
other opportunities.

7. Rethinking The Three Legged
Shipping Route
When considering the process of ocean shipping, it’s often easiest to break it
down into three phases, or legs.

8. Pre-Carriage
Before the container is delivered to the port
or terminal.

9. Carriage
The transition from port to port.

10. On-Carriage
After the container is picked up from the
subsequent terminal.

11. The pre-carriage and the on-carriage, the inland movements
before the container is delivered to the port/terminal and the
inland movement after the container is picked up from the
port/terminal, offer their own opportunities for shippers.
The door to port and/or port to door legs may push shipping rates
above market costs and drag port-to-port benchmarking shippers
into less favorable agreements with carrier partners
While the ocean shipping leg only offers the possibility for
shippers to switch from one carrier to another to control costs
and service, the pre and on-carriage legs offer multiple
opportunities.

12. Shippers can choose between
different modes of transportation
such as rail, road or barge and they
can opt for the transportation
activity to be performed by either
the shipping line (carrier haulage)
or by the client or by their
transporter (merchant haulage).

13. Overcoming Volatility

14. It is within the carriage-leg
(port-to-port) that pricing is
the most volatile and hence
this is the focus of our
platform – port-to-port –
which includes such
charges as terminal
handling, bunker
adjustment factor, currency
adjustment factor, canal
surcharges and all other
port-port relevant
surcharges applied by the
individual service providers.

15. For market volatility an
example can be found from a
recent reuter’s article in
which amazon’s beijing
century joyo indicated it
planned to charge customers
between $530 and $2,530 to
transport a 40-foot dry van
container from shanghai to
hamburg. According to the
article, the rate is comparable
to those charged by other
forwarders, and the wide
range would give it flexibility
to adjust its prices based on
volume.

16. The real-time data in market movements further provides the
much needed market intelligence that has been missing until now
for suppliers..
Knowledge of capacity constraints or surplus, demand by trade
lane and other market intelligence is vital in a global environment
that is surrounded by much uncertainty and risk.
Even though spot market rates tend to be the most volatile,
buyers need to also monitor long-term rates as well because
long-term trends vary from those of short-term and will have
implications to buyers’ procurement strategy.

17. Learn how Xeneta can help
You get insight and intelligence into
your global ocean freight prices and
change your logistics business:
Request
Demo Now