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Nov.10, 2014

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INTERNATIONAL MARITIME IMPORTING | EXPORTING | PORTS | CARRIERS | BREAKBULK | GLOBAL LOGISTICS 42 THE JOURNAL OF COMMERCE www.joc.com NOVEMBER 10.2014 By Greg Knowler ROBERT MYLOD, THE former Priceline CFO who played a major role in automating the online consumer travel market, has joined online freight pricing and quoting net- work Freightos, which plans to mimic the automated system that was such a game- changer in the travel business. "Freightos is poised to revolutionize the trillion-dollar freight industry, introducing the same efficiency and transparency that Priceline brought to consumer travel," said Mylod, who has joined the Freightos board of directors. "While the freight industry is inherently complex, Freightos' innovative software can vastly improve the global freight quoting process and introduce significant savings to global supply chains," Mylod said. The Freightos network is bringing inter- national freight online with automated pricing and booking, and this year has seen 600 percent year-over-year growth in online quoting. But not everyone believes the freight industry is ripe for transforma- tion, which would mean disruption. Mylod played a major role in transform- ing the Priceline Group into one of the world's most profitable and valuable technology companies. He is currently a director of Dropbox, Everbank and Redfin. Companies acquired by Priceline under Mylod's direc- tion include Travelweb, booking.com and Agoda, which account for a large portion of Priceline's profit. Freightos CEO Zvi Schreiber said almost $19 trillion of goods were imported and exported in 2013, five times the 1990 fig- ure, but the technology used in the cargo industry hasn't changed at the same pace. "Importers and exporters are people who buy movies, clothing and food online in seconds. They shouldn't wait days for freight price quotes, with inaccuracies that drive up shipping costs," he said. The delay in obtaining quotes for ship- ments of freight is something forwarders have lived with for years. Bonn and Boston, the consulting division of Simon-Kucher & Partners, conducted the Ocean Freight Mystery Shopping Study 2014, calling eight of the world's largest carriers and forward- ers in China and the U.S. and posing test questions, asking each for quotes on weekly ocean freight shipments of 20 TEUs. The study revealed some amazing results, Schreiber said. "An incredible 40 percent had no response, and the average response to a quote was 60 hours," he said. "That is crazy considering that we are in 2014 and passenger travel has been online for a decade, and e-commerce as well, but freight forwarders are still quoting like they are in the last century." He compared shipping to low-cost air- lines, and said if a ship was about to sail and there was space available, it made sense to try to fill it, at whatever price. "A low-cost airline will sell the last seat for $10 because it is fly- ing anyway. But this is one of the areas where the industry is broken. If a ship is sailing and there is spare capacity, it takes so long to get the rate from the carriers to the forwarders and from the forwarders to the shippers that most of the time they can't sell that space and the ship sails unfilled," Schreiber said. "The carriers agree to carry a container for $200, but that information doesn't trickle down to the shippers," he said. "The fact that a change in prices can go electronically and instantly gives the carriers more flexibility to sell their spare capac- ity. The special deals are not getting to the shippers because there is no platform for dissemi- nating those rates." For wa rders subscribe to Freightos and provide their sell or buy rates, and prices are also obtained by the online platform directly from carriers and agents. "We are a network as well, so rates can be shared," Schreiber said. "The larger freight forwarders have offices in every country, but the small to medium-sized for- warders are very dependent on agents. They give us the rates for their main lanes, but on the smaller routes, they leverage the network and use other people's rates. The forwarders quote off their tariffs and don't use spot rates." But not everyone is convinced about the viability of automated freight quoting, and the doubters are generally involved in the ocean freight side of the business. Randy Chen, special assistant to the president of Wan Hai Lines, said comparisons are con- stantly drawn between container shipping A NEED FOR SPEED A former Priceline executive looks to bring his automated booking and pricing model to the freight industry "Importers and exporters are people who buy movies, clothing and food online in seconds. They shouldn't wait days for freight price quotes." Zvi Schreiber

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