3 THINGS THAT MAKES A SHIPPER SWITCH CARRIER/FREIGHT

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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

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FREIGHT RATES?

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WITH THE RIGHT PARTNER, A SHIPPER AND CARRIER/FREIGHT FORWARDER CAN SWEEP ASIDE THE COMPETITION, ALLOWING FOR INCREDIBLE GROWTH FOR BOTH PARTIES. HOWEVER, THE CHANGING ENVIRONMENT MAY HAVE A PROFOUND IMPACT ON SUPPLIER RELATIONSHIPS.

BASED ON SEVERAL CUSTOMER INTERVIEWS WE CONDUCED, IT IS PRICE, RISK MANAGEMENT AND LOSS OF TRUST THAT STAND OUT

AS THE MAIN REASONS FOR SWITCHING SUPPLIERS.

PRICE

WE ASKED ONE OF OUR SHIPPER CUSTOMERS TO LIST FIVE REASONS THAT WOULD CAUSE A SHIPPER TO SWITCH CARRIERS. HE RESPONDED FAST AND DIRECTLY - WITH

ANOTHER CUSTOMER NOTED THE LACK OF WILLINGNESS OF INCUMBENT CARRIERS TO REACH CONSENSUS ON WHAT THE APPROPRIATE PRICE LEVEL IS. SUPPLIERS DISTRUST AND QUESTION THE NEW TENDER RESULTS AND SUSTAINABILITY OF PRICES OFFERED BY NEW SUPPLIERS.

ARE YOU PAYING THE RIGHT CONTAINER

FREIGHT RATES?

DISCOVER SAVINGS POTENTIAL IN REAL

TIME.

RISK MANAGEMENT

BUSINESSES ARE EVOLVING AS CUSTOMER REQUIREMENTS CHANGE. WITH SUCH CHANGES COMES THE NEED TO MANAGE RISK.

ACCORDING TO SOME SHIPPERS, A SHIFT IN TRADE LANES DUE TO CHANGING NEEDS OR A SIGNIFICANT VOLUME INCREASE ON ANOTHER LANE MAY RESULT IN THE INABILITY FOR THE INCUMBENT CARRIER TO PROVIDE THE REQUESTED CAPACITY.

BASED ON SEVERAL CUSTOMER INTERVIEWS WE CONDUCED, IT IS PRICE, RISK MANAGEMENT AND LOSS OF TRUST THAT STAND OUT

AS THE MAIN REASONS FOR SWITCHING SUPPLIERS.

LOSS OF TRUST

TRUST IS CRITICAL TO ANY RELATIONSHIP AND A BAD EXPERIENCE OR CONTRACTUAL FAILURE CAN DESTROY A SHIPPER AND SUPPLIER PARTNERSHIP QUICKLY.

A BID IS STARTED IN ORDER TO OBTAIN A BENCHMARK. THE BENCHMARK CAN THEN OFTEN BE STRATEGIC PRICING FROM A NEW SUPPLIER BECAUSE THEY WANT TO ESTABLISH A RELATIONSHIP. HOWEVER, THREE MONTHS INTO THE NEW CONTRACT, THE SUPPLIER GOES BACK TO INCREASE THE PRICE.

INEVITABLY, INACCURATE INFORMATION AND/OR INABILITY TO STICK TO COMMITMENTS COULD MEAN RENEGOTIATION AND CHANGING SUPPLIERS SOONER THAN THEY MAY ANTICIPATE.

WHILE FUEL ISN’T AS BIG A FACTOR FOR RAILWAY COSTS, IT DOES MAKE UP APPROXIMATELY 20 PERCENT OFTOTAL OPERATING COSTS, AND CONSTITUTES A MAJOR LINE ITEM FOR RAIL COMPANIES

THE AFTERMATH:

IN THE END, THERE ARE A NUMBER OF REASONS AS TO WHY A SHIPPER WOULD LOOK TO SWITCH SUPPLIERS. ALTHOUGH, MOST OF THEM ARE PREVENTABLE, ULTIMATELY THE DECISION IS OFTEN BASED ONLY ON PRICE BECAUSE IT’S THE EASIEST WAY TO MEASURE A PARTNER.

TOOLS THAT PROVIDE INSIGHT INTO HOW SHIPPERS AND SUPPLIERS PERFORM AGAINST THE MARKET AS WELL AS DETERMINING IF PRICES ARE TRULY COMPETITIVE ARE NEEDED INCREASINGLY AS COMPETITION IN A CHANGING ENVIRONMENT REDEFINES SHIPPER AND SUPPLIER RELATIONSHIPS.

LEARN HOW XENETA CAN HELPYOU GET INSIGHT AND

INTELLIGENCE INTO YOUR GLOBAL OCEAN FREIGHT PRICES AND CHANGE YOUR LOGISTICS

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