Ocean freight rate benchmarking and market intelligence platform, Xeneta, is launching a product offering that aims to “transform the way shippers, freight forwarders and carriers conduct freight rate negotiations”.
The Oslo headquartered firm has created a new offering, Xeneta Shipping Index (XSI) that allows all parties to set rates at transparent, efficient and fair prices that directly follow market fluctuations.
The firm said it ensures all stakeholders get the right price for their products and services, relationships are improved and complex, time-consuming negotiations become efficient.
“After several years working closely with cargo buyers and sellers, the one thing that is a clear pain point for many organisations is the inefficiency and opacity of contract negotiations,” explains Xeneta CEO Patrik Berglund.
“Freight rates are dynamic and prone to rapid change, so a shipper traditionally negotiating what they consider to be a fair rate for a long-term ocean freight contract can find that, three months later, they’re paying far in excess or below the actual market rates. This has the very real potential to make their products noncompetitive in the marketplace or risk supply chain disruptions.
“Similarly, for carriers, when the market is low or high, they risk shippers taking their business somewhere else or not living up to their contracts as these are not enforceable. The current situation is not ideal for buyer or seller and neither one has the upper hand.”
XSI is a global ocean freight index with its foundations in Xeneta’s neutral database of over 65 million contracted rates, covering over 160,000 port-to-port pairings, which is crowd-sourced from more than 700 leading international businesses with power shippers like Electrolux, Nestle, Unilever, ThyssenKrupp, Tata Steel and Continental.
The new index allows stakeholders in the negotiating chain to tie rates to the market relieving from frequent or periodic contract negotiations.
“XSI allows independent, verified and up-to –the-minute rates to be tracked over major shipping routes covering 57 corridors representing 95% of global intercontinental volumes, such as Asia-Europe, Europe-Asia, trans-Pacific, trans-Atlantic,” Berglund explains.
“If all parties looking to sign a contract agree to use the index they can secure competitive rates over the long-term, building trust and reliable relationships with one another. What’s more they can save on all the resources, guess work and hassle associated with negotiating.”