Freight agents and logistics managers should concentrate on supply-chain efficiency, not spot rate management, claims technology CEO
October 23, 2015 by Mike King
Forwarders and logistics managers are spending too much time managing ocean freight spot rates and should instead look to make supply chains more efficient, according to the CEO of one leading freight and logistics technology provider.
Alex Ruf, CEO of Centrolene Solutions, which provides IT-based freight networking services – and the technology platform for the freight forwarder network Centrolene Network – said that forwarders had little influence on the stability of rates because carriers continued to put more capacity into a slow-growing market, a combination that would inevitably cause fluctuations until supply and demand became more evenly attuned.
The result, he warned, was that forwarders were spending “too much energy playing the ‘rates up, rates down’ game” rather than looking for better ways to optimise supply chains. “Forwarders need to look for smarter ways to compete and provide a better quality of service, rather than relying on rates which they cannot control,” he said.
“By embracing technology, forwarders can offer a higher standard of service that will help their customers optimise their supply chains. The industry as a whole will benefit if technology is used to create an electronic paperless and optimized workflow.”
He said automation would save a significant amount of time and money for everyone, although it was unlikely to have an impact on the fluctuating spot market. Ruf also forecast that rates would continue to fluctuate in the medium to long-term.
“Looking at the order books of the carrier industry, it is hard to see when the bearish spot rates will come to an end,” he said. “And the delivery of huge new vessels will only add to the problem of overcapacity.”
Centrolene is one of a number of companies now offering IT-based supply chain solutions designed to enable forwarders to expand operations and reduce costs. Its recently launched membership-based organisation of forwarders, Centrolene Network, uses technology to give local or regional forwarders a global network, according to Ruf.
He said the company’s ‘C-Suite’ portfolio was designed to manage rates surges, fluctuations, and exceptions that were inherent in managing a modern supply chain. “It is the world’s first and only fully integrated technology solution for the logistics industry,” he claimed.