WEIGHING IN ON SHIPPING RATES VERSUS VALUE OF GOODS

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ABOUTXENETA

At Xeneta we believe there is an untapped potential for everyone in the industry, to systematically learn from our individual and collective efforts. We hold true that "if you cannot measure it, you cannot improve it". That’s why we think actionable metrics is the key to continuously evolve for every business, and ultimately the entire industry. Rethinking global logistics is the vision of Xeneta.

With international experience from the logistics industry, we have first-hand knowledge of the challenges related to high volatility and lack of transparency in the ocean freight market. By combining logistics background and information technology expertise, we found the solution to these challenges.

WE ARE TRANSFORMING GLOBAL LOGISTICS

ARE YOU PAYING THE RIGHT CONTAINER

FREIGHT RATES?

DISCOVER SAVINGS POTENTIAL IN REAL

TIME.

CONTACT US.

IN A MARKET THAT IS CHARACTERIZED WITH ROCK-BOTTOM SHIPPING RATES AND EXCESS CAPACITY, SOME CAN’T HELP BUT WONDER WHY CONTAINER CARRIERS ARE PUTTING UP WITH THE LOW RATES.

IN OUR LATEST TWITTER SURVEY, WE ASK WOULD

SHIPPERS CONTINUE SHIPPING IF SHIPPING COSTS WERE

HIGHER THAN THE PRODUCT IS WORTH.

THE RESULTS INDICATE A BIT OF UNCERTAINTY WITH 44% INDICATING

YES, SHIPPERS WOULD CONTINUE TO SHIP IF SHIPPING COSTS WERE HIGHER THAN THE VALUE OF THE

PRODUCT AND ANOTHER 44% NOTING SHIPPERS WOULD NOT

CONTINUE TO SHIP UNDER THOSE PREMISES. AN ADDITIONAL 12% OF THE RESPONDENTS WERE UNSURE

EITHER WAY.

THE MARKET REGULATES THE TRADE SO IF DEMAND IS THERE, THEN ANY SHIPPING COST WILL

BE ACCEPTED,

- Menos Moschoutis, an industry consultant

‘WE WOULD RATHER CLOSE THE FACTORY

INSTEAD’

HOW CAN THEY (CARRIERS) LIVE WITH THE FACT THAT FOR TWO MONTHS THEY WERE READY TO

SELL PRODUCTS FOR $65.00 AND NOW THEY ARE ASKING $5,000? SHOULD THEY NOT HAVE TWO MONTHS AGO SAID ‘WE WILL NOT SELL THIS

PRODUCT FOR $65.00, REGARDLESS IF OTHERS DO IT, WE WILL NOT BE A PART OF IT.

- Bjørn Vang Jensen, vp global logistics, Electrolux in an interview with Shippingwatch

BY WAY OF ANALOGY, VANG JENSEN IMAGINES WHAT THE RESPONSE FROM ELECTROLUX WOULD BE IF IT OFFER TO SELL VACUUM CLEANERS FOR $1.00 APIECE. “DO YOU THINK WE WOULD HAVE SOLD THE VACUUM CLEANERS? NO, WE WOULD NOT. WE WOULD RATHER CLOSE THE FACTORY INSTEAD. NEITHER WE, NOR ANY OTHER MAJOR MANUFACTURER WOULD IMAGINE ACCEPTING THAT KIND OF SITUATION.

FIGHT FOR MARKET SHARE

THE MARKET REGULATES THE TRADE SO IF DEMAND IS THERE, THEN ANY SHIPPING COST WILL

BE ACCEPTED,

- Menos Moschoutis, an industry consultant

ACCORDING TO RECENT WALL STREET JOURNAL, MAERSK, HAPAG-LLOYD AND CHINA COSCO BULK SHIPPING CO. HAVE 30% MORE CAPACITY IN THE WATER VERSUS CARGO.

CONTAINER RATES AS A COMMODITY

SO WHERE DOES THIS LEAVE THE SHIPPER AND THE CARRIER? ACCORDING TO MR. MOSCHOUTIS, ONE SOLUTION IS TO IMPLEMENT COMMODITY RELATED RATES. XENETA’S CEO, PATRK BERGLUND, SEEMS TO AGREE AS WELL.

FOR THE SHIPPER, HEDGING WOULD DEPEND ON THE NEEDS OF THE SHIPPER. RETAILERS WOULD BUY THE APPROPRIATE NUMBER OF TEU CONTRACTS FOR A GIVEN TIME PERIOD WHICH WOULD THEN LOCK IN THEIR PRICING AND PROFIT FOR THAT SHIPMENT.

COMMODITIES ARE TYPICALLY TRADED ON EXCHANGES AND CAN BE HEDGED.

LEARN HOW XENETA CAN HELPYOU GET INSIGHT AND

INTELLIGENCE INTO YOUR GLOBAL OCEAN FREIGHT PRICES AND CHANGE YOUR LOGISTICS

BUSINESS:

REQUEST DEMO NOW