Definition
A shipping line using foreign agents for interacting with individual customers. The line receives copies of bookings/ export manifest by EDI from export agents, and submits EDI message with import manifest to discharge agents. Leave it to individual foreign agents to invoice and collect payments, and receive monthly re-imbursements from foreign agents reflecting freight deducted with agents commission.
Line Benefits
Using e-Business to provide up-to-date sailing schedules available for direct customer and agent self-service, issue tariff rate freight quotes and take bookings will provide the following specific benefits to the shipping line on top of the generic benefits mentioned in introductory article:
- up-to-date sailing schedules reflecting operational adjustments available to all agents and customers instantly
- shipping line direct management of products and corridors offered, rates and corporate surcharges, and distributed local agents management of local fees
- dynamic space re-allocation amongst agents in accordance with actual bookings, securing higher utilization and higher yield
- close monitoring of actual customer activities within agents area
- principal direct management of release of acceptance of alternative products/ cargo (40 instead of 2x20, dry instead of reefer) triggered by (lack of) actual bookings of primary/ preferred cargo
- re-structuring of agents agreement reflecting that major chunk of agents work now done as self-service online transaction (customer schedule enquiry, tariff rate freight quotes, bookings)
Picture: some top-tier shipping lines with own agencies already provide direct -or indirect, via portals- e-business support for the export shipping process with the exception of freight quote issuing, which is not common practice to support with e-business. Principals with foreign agents use e-business less frequently.
Issues & Challenges
Some of the issues that shipping line principals will face when offering e-Business:
Optional or mandatory for agents to use: The line can dictate that all bookings must be entered directly by customer in corporate e-Business website. Alternatively, if some agents are allowed to do freight quotes and take bookings via phone, fax, email or direct customer visits, the agent needs to enter the booking in the e-Business platform on behalf of their customer, as the logging of all bookings in the e-Business platform is a must in order for the e-Business platform to manage utilization and allocation.
Agent back-office integration: The information flow is reversed. If the foreign agent is using an in-house financial system for keeping track of revenue to be invoiced and collected, and automatically providing book keeping input, the foreign agent needs to receive the financial part of booking data from the e-Business platform. This can be done by electronic messaging (EDI/ebXML) either every time a booking is made, or as a batch transfer after the bookings for a departure is closed.
Principal Integration: The principal may at any time transfer booking data from the e-Business platform to an in-house system. This can be done by electronic messaging (EDI/ebXML) either every time a booking is made, or as a batch transfer after the bookings for a departure is closed. Alternatively the shipping line can use the e-Business platform as the sole commercial system, allowing sharing of data with relevant load/ discharge agents.
Agent allocation versus first-come-first-served: An e-Business platform keeping online bookings for all load ports gives the principal the choice to continue with load port based (agent) allocations, or to accept bookings basis first-come-first-served. The later will secure a higher utilization. Maintaining load port based allocation secure stability for the agents, and the e-Business platform may still support the liner principal in adjusting agent allocations more dynamically.
Principals, who would like to learn more, please check out arl-shipping.com/eb. In upcoming shipZine articles we will elaborate on how IT-driven market pricing can be used to increase utilization and yield. Principals, who can't wait for this, can read more on arl-shipping.com/ey/.
