FedEx Logistics and Electrolux are participating in the commercial rollout of a service that enables merchants to electronically sign off on air cargo bookings before their freight forwarder completes the transaction with an airline through a digital marketplace. The parties say that makes procurement decisions more predictable and efficient.
The new capability, enabled by freight booking and payment platform Freightos (NASDAQ: CRGO), gives shippers direct visibility into the booking process handled by an agent so flight details, and necessary adjustments, are automatically communicated without manual intervention.
FedEx’s air and ocean freight forwarding arm is offering Electrolux, and other cargo owners, more transparency by providing instant price quotes, schedules and other flight details from airlines to make sure the booking is acceptable.
The enhanced connectivity provided by Freightos shines a light into the airline booking process and reduces the chance of surprises after a shipment is en route, said Freightos CEO and founder Zvi Schreiber.
“Until now, the shipper had no exposure at all to what’s actually going on with the airline. The freight forwarder was sort of a black box, and the shipper got quite an unpredictable experience,” he said in a phone interview from Jerusalem.
Freightos is the multiparty shopping site, like Kayak for air travel, where businesses book shipments with freight forwarders. WebCargo is the Freightos wholesale marketplace, similar to Amadeus and Sabre in passenger travel, that connects air and ocean carriers with logistics companies arranging freight transportation for businesses. Thirty-seven airlines, representing more than 50% of global airfreight capacity, now use WebCargo as a distribution channel.
FedEx (NYSE: FDX) is an investor in the Israel-based online reservation platform, which posted an operating loss of $24.3 million last year and projects lower revenue in 2023 due to the soft shipping market. The company has continued to grow bookings during the downturn even as gross booking value has declined with rate deflation. It became publicly listed on the NASDAQ exchange earlier this year in a merger with a shell company. The 10-year-old company is using money it raised to help to cover heavy spending on technology innovations and market growth continue to
Freight agents typically rely on email or phone calls to make sure freight transportation quotes are acceptable to customers. That adds time and effort even when freight forwarders are using online systems for speed and efficiency. It can take one or two days to close a quote with a customer and another day to book with the airline because of the back-and-forth, especially when different time zones are involved. And information exchanged about airlines’ estimates for days in transit, or on-time guarantees, are often vague, with few alternative routes presented in one display.
Through Freightos, shippers can view all the flights, rates and service levels, and optimize how they want their goods to fly, without all the phone calls, much like a traveler does when booking with a passenger airline, said Schreiber. And, depending on their priorities, there often is a quicker or cheaper transit option than the forwarder might select on its own.
“If you’re flying from London Heathrow to JFK, which is a major trans-Atlantic route, sometimes the cheapest option is actually on El Al through Tel Aviv or Finnair through Helsinki,” the Freightos chief said. “As a passenger you wouldn’t do that, but cargo doesn’t care. Sometimes they find new options which the forwarder maybe wouldn’t have offered them because it’s less obvious. Or, maybe, it’s really urgent and they don’t want to wait five to eight days; they want Monday morning’s next flight and they might be willing to pay a bit more.”
And when a flight is canceled or delayed, or the goods don’t make it on the scheduled flight, Electrolux will get an instant notification and options for rebooking on another flight, which speeds up the normal forwarder-shipper consultation process.
“Freightos empowers our planners to book the freight that they need at the cost and delivery time which is aligned with their budget and requirements. This removes unnecessary back-and-forth between planners and buyers, all while giving us … the consolidated data to influence future supplier decisions,” said Daniel Cole, logistics purchasing director at Electrolux Group, in the Freightos press release.
Stockholm-based Electrolux is a major manufacturer of washers and dryers, vacuum cleaners, refrigerators, and other appliances. Last year it had sales of $12.8 billion.
The shipper visibility feature required Freightos to connect WebCargo, which features airport-to-airport moves, with its door-to-door routing engine so the end customer understands the price and schedule for the entire journey. Shippers can’t automatically book a truck delivery through Freightos yet, but the provided rate combines ground and air.
It’s up to the forwarder whether to assess customers a fee for the enhanced visibility, said Schreiber, but he noted that the system cuts down on work for the forwarder.
“Carriers like it as well because their brand is more exposed to the shipper” and may have a brand loyalty they want the forwarder to take into account, said Schreiber.
The premium service partly addresses a long-standing concern among many air logistics professionals that the industry’s growth is hindered by not tailoring service with cargo owners in mind even though they aren’t an airline’s direct customer.
Earlier in May, Freightos introduced a comprehensive dashboard with market trends, tools and insights, designed to help shippers negotiate contracts with carriers and make better supply chain decisions. The analytics package includes data on specific trade lanes, the Freightos Baltic and Air indexes, and a live news feed
Click here for more FreightWaves/American Shipper stories by Eric Kulisch.
Twitter: @ericreports / LinkedIn: Eric Kulisch / ekulisch@freightwaves.com
RECOMMENDED READING:
Air cargo portals automate cross-border booking amid neutrality concerns
Cash burn saddles digital portal Freightos as shipping market sinks
The post FedEx Logistics rolls out instant visibility feature for airfreight clients appeared first on FreightWaves.