Sharp increase in “Pandemic Procurement” activity for Logistics Platform, set up to handle ad-hoc freight management.
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SINGAPORE, Oct. 13, 2020 /PRNewswire/ — Cargobase.com reported soaring quarterly logistics traffic as customers have increased their usage of the platform to automate spot-buy freight, shining the spotlight on how the coronavirus pandemic has fuelled demand for logistics solutions equipped to manage ad-hoc cargo.
Cargobase reports 273% growth in revenue by far the highest on record ever
The pandemic has highlighted the vulnerabilities of global supply chains: Companies have proven ill-prepared to deal with supply chain disruptions of this scale, ranging from factory closures to lane disruptions to supply/demand spikes. Operating on Just-In-Time models and with tight inventories has exacerbated this impact. As a result, demand for spot-buy freight (anything that falls outside of regular freight agreements between e.g. manufacturer and logistics provider) has surged, along with the need for richer analytics to maintain visibility on cost and performance.
The Singapore-based Logistics Platform said that transactions on its platform have grown 240% and revenue has risen 273% from a year earlier – by far the highest on record ever in its seven years since inception. Cargobase’s key customers include Fortune500 Companies in Electronics, Automotive Manufacturing, Medical Equipment and Oil & Gas, such as Continental Automotive, Siemens and Bosch, just to name a few.
The surge in activity reflects the central role a platform like Cargobase plays in a logistics crisis, helping to automate manual procurement processes necessary to fulfil global supply chain demands. This pandemic saw an increase in Cargobase users, freight frequency, urgency, complexities, and volumes.
"The main reason for this surge is that shippers (e.g. manufacturers, etc.) either can’t get or can’t rely on agreed long-term rates anymore due to the changes in capacity. The COVID-19 pandemic has dramatically increased rates and transit times. In May 2020, Cargobase observed airfreight quotes between China and the US fluctuating between US$3 and US$30 / kilo. These disruptions in the supply chain have forced shippers to procure freight services on-the-spot at high cost, whilst keeping an eye out for the next most cost-effective solution – a key feature the Cargobase team has mastered in our platform with our unique quoting mechanism," shares Wiebe Helder, CEO & Founder of Cargobase.
In response, Cargobase launched a new version of its – Cargobase On The Go! – mobile app, helping shippers and providers to move away from emails and work at a faster pace. Cargobase has also been working to increase connectivity capabilities with its customer ERP and Data Visualisation Systems, to increase efficiency, improve visibility, and reduce duplication of information. Cargobase is also currently expanding its staff team to include Key Account Managers, Data Analysts, and Marketing Personnel, to keep up with its "ready-to-ship-in-under-two-weeks" commitment to new users and will soon launch a Freight Tender Module in anticipation of the global economy adapting to the "New Normal".
The bulk of the growth is seen in Q3 2020, which doubled from Q2 2020. Cargobase expects the number to grow as the pandemic continues and looks to keep bringing increased cost avoidance and profitability to both shippers and providers.
Above and beyond Freight Procurement, Cargobase provides its users with a suite of dynamic solutions which include freight management, track and trace, invoicing and auditing, rich data, and analytics.
Cargobase also published a paper "Freight Procurement in a Pandemic – a COVID-19 Special" and blog posts like "Getting Freight Quotes Faster" to share with the industry, insights and business case studies on best practices in times of crises.
"The current crisis is demonstrating the adaptability and capability of Cargobase’s suite of solutions. It is the most challenging time the industry has ever faced, and we are proud we can help our clients navigate these times," says Helder.
Cargobase: Air Freight Cost Avoidance is at 26.7%
Across Freight Modes Cost Avoidance is on the Uptick
The omnimodal coverage offered by Cargobase reports Cost Avoidance increase across all freight modes by 17.9%. The most remarkable statistic is Air Freight, at 26.7%. The difference in average price quoted and final quote chosen is calculated as Cost Avoidance. This means across the board, Logistics Providers are more astute, agile, and aggressive than ever.
Cargobase’s most used Strategic Procurement feature, allows users to invite (select or all eligible) shippers to quote, which results in users getting an online, single-screen comparison view, in real-time, of bidders to its RFQ (Request For Quotes).
"The pandemic has broadly been a boon for companies that are nimble in shifting gears and automating their physical processes through digital solutions, but a bane for those that rely on legacy systems and operations. We hope and look forward to the continued increase of our platform adoption as more companies share our vision, of deploying smarter logistics moving forward," says Helder.
Automation: The Great Equalizer
With the increasing data and traffic coming through the platform, Cargobase is able to glean real-time insights on how Companies are transforming the way their Supply Chains perform. One astounding statistic is that the Top 25 Freight Forwarders are now winning only 30.5% of air freight business which they bid for, a dip from its previous rate of 53.3%.
"Our data shows that the Top 25 Freight Forwarders won only 30.5% of all air-freight spot-buy business in Q3 2020 compared to 53.3% in Q1 2020. The lack of automated quoting with the top 25 Freight Forwarders is costing them heavily, and, in consequence, benefitting the smaller freight forwarders. As a result, we are seeing increased efforts from the Top 25 Freight forwarders to connect to their quoting engines."
The Future of Freight
Anticipating the global economy entering its next phase, Cargobase will soon launch a pilot version of its new customizable "Freight Tender" solution – currently in beta mode – to be able to support its shippers for when mid/longer-term freight procurement can happen again.
The Coronavirus crisis is likely to have a permanent effect on global supply chains and the logistics industry. Technology solutions such as Cargobase offer a way for companies to be more resilient and agile in their logistics processes: both in the short term as the world grapples with the pandemic, as well as the longer-term where we enter and adapt to the "New Normal".
About Cargobase
Cargobase is a Singaporean Logistics-Tech company founded in 2013 and headquartered in Singapore, the vision is to simplify logistics processes for all.
The result is a cloud-based Logistics SaaS – that supports both shippers and providers – to manage freight transactions, from quoting to tracking, audit to analytics. Purpose-built in concert with supply chain experts, Cargobase is 100% customizable, and offers omnimodal coverage and end-to-end optimization to its users.
Today, Cargobase is empowering the world’s leading shippers, and helping businesses transform the way their supply chains operate and perform in a hyper-evolving logistics landscape.
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