In the world of global ocean shipping, bigger is better. Or so goes the theory. Yet even as carriers and third-party logistics providers grow through acquisition or space-sharing partnerships, medium-sized entities continue to thrive.
That’s especially the case with non-vessel operating common carriers (NVOs) and freight forwarders. Theirs is a world that has traditionally been populated by smaller players that somehow manage to compete with the global conglomerates.
They do it through accessing services and software platforms that level the playing field, deploying the same I.T. tools that are available to their much larger rivals. One such provider is BuyCo For Growth, creator of an application that groups medium-sized freight forwarders into a virtual worldwide network. Founded in 2014, BuyCo currently has some 30 forwarder members with a presence in 70 countries and 242 ports. Its collaborative online platform offers carrier sailing schedules, freight rates and shipment-execution services.
BuyCo founder Carl Lauron says the goal is to attract 250 freight forwarders from around the world, all sharing a common platform. It’s adding members at the rate of one per week. The company’s plan calls for having between two and six forwarders within each country.
To serve those forwarders, however, BuyCo needed the ability to link up efficiently with the carrier community. The initial platform, Lauron says, “is one brick of what we are building.” A truly collaborative service has to involve partners at both ends of the transaction.
Partnering With CargoSmart
To handle the carrier side of the equation, BuyCo turned to CargoSmart Limited. Linking up with more than 30 ocean carriers, CargoSmart provides shipment-management data that includes sailing schedules, visibility, documentation, contract management, compliance and benchmarking.
For BuyCo, CargoSmart transmits ocean schedules via Web services, giving BuyCo’s members information on door-to-door routes and multiple vessel legs. “Having access to the most current sailing schedules is critical for providing accurate quotes and making bookings for customers,” according to Christopher Taylor, executive vice president of Empresas Taylor, a Chile-based BuyCo member.
BuyCo’s implementation of the CargoSmart platform occurred quickly, Lauron says, helped along by technical teams from both companies. “They were super responsive,” he says of CargoSmart.
Lionel Louie, chief commercial officer with CargoSmart, says BuyCo is unique among his company’s accounts because of its role as an aggregator of multiple forwarding services. He describes BuyCo as “kind of like an NVO, but an NVO on steroids.”
“Instead of integrating with 50 or 60 freight-forwarder customers, it’s helping me to consolidate all of this traffic,” Louie says, adding that the relationship with BuyCo helps to ensure data quality and aids in facilitating “last-mile” deliveries.
Carriers can, of course supply key data directly to forwarders and NVOs. But Louie says CargoSmart fills an important need, especially for forwarders that spread their business among multiple carriers. BuyCo’s ability to reach dozens of carriers through a single portal, aided by CargoSmart’s shipment data, can streamline an otherwise unwieldy process.
Enabling the Connection
BuyCo implemented the CargoSmart platform in the first quarter of 2016. The whole process, including testing and the first group of live transactions, took about six weeks, says Louie.
Access to more than 30 carriers’ sailing schedules happened faster than that. “It was turned on right away,” says Louie, “probably in two to three weeks.”
Today, BuyCo members can go onto the company’s website and view schedules provided by CargoSmart. BuyCo matches up available rates with those schedules, and ensures that its network of forwarders is getting the best possible deal from carriers. Then the forwarders can proceed to the booking process, again enabled by CargoSmart. “It’s pretty much a seamless integration between the two platforms,” says Louie.
The services offered by BuyCo and CargoSmart come at a time when shippers are facing more complex rules and procedures than ever before. They include a requirement issued by the International Convention for the Safety of Life At Sea (SOLAS) to provide carriers with the total weight of a loaded container (known as Verified Gross Mass, or VGM) prior to its being loaded onto the ship. Louie says CargoSmart has already integrated the VGM submissions into its platform, and will be turning on that capability for forwarders in time for the rule’s July 1 deadline. In May, shippers and forwarders began collecting and submitting sample VGM information through the testing environment of CargoSmart’s collaborative platform.
“When we started,” says Lauron, “we were not aware of the new SOLAS implications. “That came as a surprise. But CargoSmart is handling this matter.”
The two companies form a complementary relationship. CargoSmart’s data and shipment-management services allow BuyCo to focus on recruiting forwarders into its network. “Whereas my strength is connecting with carriers, they look after the demand side,” Louie says.
In partnering with CargoSmart, BuyCo sought to build one electronic data interchange “tube,” allowing for direct access to carriers representing more than 92 percent of worldwide cargo volumes, says Lauron. BuyCo also was attracted by the rapid time to market that the CargoSmart service promised.
“That’s what was driving our decision to go with CargoSmart,” Lauron says. “We just found it was the best partner.”
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