All along the West Coast today, container ships are backed up in a traffic jam that would rival any pre-Covid Los Angeles rush hour on shore. There’s a worldwide shortage of available containers. And demand on many trade lanes is so competitive, it’s creating an environment ripe for surcharges and premiums that are driving costs to unimaginable levels. It all adds up to the undeniable fact that right now ocean shipping is one of transportation’s most stressed sectors. In fact, the spread between rates on the spot market has reached never-before-seen levels, five or more times the levels of past years. Companies’ 2021 transportation budget forecasts are in obvious jeopardy, meanwhile they’re struggling with whether to renew annual contracts at high rates--or gamble with short-term commitments.
It’s no secret what happened: In early 2020 the global pandemic disrupted shipping patterns around the world, with supply and demand mismatches triggering extreme volatility on a global scale. High levels of Covid infections among dock workers have led to widespread unloading delays, creating back-ups at sea and putting at risk some companies’ ability to go to market with Easter and other seasonal goods.
One of the most challenging fall-outs is that companies have learned existing contracts that should have provided some pricing cushion, didn’t. Bloomberg writer Brandan Murray, in his January 26, 2021 article, Why Covid and Empty Containers Have Sailors Swearing, notes that among the many ripples of all this disruption, “Most rates that big companies pay for shipping are spelled out in annual contracts with the carriers,” but “those fees don’t include premiums now commonplace to ensure more reliable services like guaranteed loading.”
At Inxeption, we are the pioneer of Industrial Commerce, or what we call I-commerce. We are innovators in every sense. We transform businesses of every size with digital technology that gives them a more accurate and real-time understanding of their operations and costs--as well as providing services that make more economic sense and are uniquely tuned to the challenges customers face.
The ocean transportation market is a perfect example of how multiple aspects of our platform come together to help our customers.
First, we offer logistics services assembled by an experienced transportation industry team that has curated relationships with the most powerhouse freight forwarders in the business. Having trouble getting your cargo loaded? Our team can make it happen. Not only that, our team will coordinate across multiple entities on your behalf, saving you hours of effort and frustration. We act as your single point of contact for all overseas transportation negotiations and communications.
Secondly, our integrated financing service offerings address the issues we know our customers are facing right now. Customers can work with our Inxeption Capital team to get assistance purchasing raw materials or products needed to produce goods. With that additional liquidity, customers can get their freight on the ships, through customs, and to their customers without impacting their existing cash.
Third, the combination of our technology and our platform architecture empowers what we call price innovation. We help you use your own data to help us determine pricing that is both predictable for you today, and that helps you prosper over time. The more shipments we do together, the better your pricing and the better rates we can offer you on related services like cash advances and trade finance. The more business we do together over time, the better your insights are into your own operation and other opportunities to improve your processes to trim costs and improve efficiency.
As a technology-driven company, we don’t believe smoothing price volatility is just a timing and shopping game. Instead, we see the operational transparency that fully digital processes provide, as the foundation of any future success.
In that vein, we’re also excited to announce a brand new service we call Spyglass. We’re integrating the most advanced real-time tracking technology onto our platform so you get one-pane-of-glass visibility into the location and status of your orders. Among other benefits Spyglass uses the latest physical tracking technology to create meaningful, real-time insights that make it easier for a company to manage expectations with trading partners and avoid costly accessorial charges.
At Inxeption, one of the great benefits of the operational insights our technology provides is that it can elevate our conversations with customers above immediate stress, above the fray of front-line shopping for spot rates or negotiating special fees. Taken as a whole, the combination of innovative, predictable pricing, financial products designed to smooth cash flow, and now, real-time information on the geographic location of a given shipment and a given container can calm the otherwise rough waters of international shipping.It’s a big picture solution to a short-term problem that keeps on delivering benefits when the crisis is over.
That’s why we take advanced technology, make it work with our customers’ business data, and simply call it Doing Business Better.