Interview: Inna Kuznetsova, President of INTTRA Marketplace

Global e-commerce platform INTTRA is the world's largest electronic marketplace for carriers, freight forwarders and shippers. Members of INTTRA’s network of 220,000 freight forwarders and shippers make booking requests withover 50 major carriers and non-vessel operating common carriers via the firm’s service, where they can also view ocean schedules, data analytics and tracking information, get invoicing and create bills of lading electronically.

By the nature of its business as a neutral platform software company, INTTRA has close contacts with leading industry players on all sides of shipping transactions. Maritime Executive spoke recently with Inna Kuznetsova, President of INTTRA Marketplace, in order to learn more about the firm's collaborative efforts to prepare for new SOLAS Verified Gross Mass (VGM) requirements for container shipping.

Beginning July 1, the VGM amendment to SOLAS will require shippers to certify the gross weight of each container (tare plus contents) before it may be loaded on board – and, INTTRA's customers say, the industry will have to make many changes to meet the new requirements.

Q: Can you tell us about INTTRA's findings on the impact of VGM?

Kuznetsova: When we realized the level of possible disruption from VGM, we started to look at ways in which we as a software company could help minimize the impact. Lots of questions immediately started popping up about the timing and format of submissions, and in discussions with companies we realized that the problem was far bigger than coming up with a new product. The problem was in defining the details of the process for exchanging information.

Here is an example of an apparently simple process-related question: when should we submit verified gross mass? At first we thought we could just add it to our existing booking form. But at the time of booking, most freight forwarders do not know what the gross mass of the container will be. Even regular shipments may have weight changes over time, and in addition, the shipper may not know what the tare mass of each container will be. The question becomes even bigger with LTL shipments.

The next form we could use for transmission of VGM is the shipping instructions, which are provided to the carrier right before a container is loaded onto ship. The instructions include details from the bill of lading. But this form may arrive too late for the carrier to include its information in the stowage plan and provide it to the port terminal with advance notice.

This means the port would have no knowledge of a container's VGM compliance before its arrival. Once a container in violation of VGM requirements enters the terminal, the port operator would have to deal with costly storage and removal for it, so ports will start implementing new business rules to keep out unverified shipments. One port told us that it would require VGM data three days before port arrival - well in advance of shipping instructions.

As an industry, we will have to add a third step for recording VGM. This means amending the business processes of container shipping, which will involve changes in the actions of thousands of people.

Q: Who will be legally responsible for verifying weights?

Kuznetsova: SOLAS clearly spells out that VGM (consisting of the mass of the container's contents plus tare) must be provided by the shipper. Whoever is listed as the shipper on the bill of lading is responsible, even if another firm packs the shipment; as an alternative, the shipper may authorize a third party like a forwarder to provide the VGM.

At the moment, without VGM, shippers give the weight for the full amount of goods shipped with the shipping instructions. The weight is not broken down by container, nor does it include container tare. This has sometimes led to uneven loading and the potential for stability problems. Related incidents led the IMO to adopt the VGM amendment to SOLAS.

Q: Can you tell us about your eVGM initiative?

Kuznetsova: We started eVGM as a moderated electronic forum for industry members to discuss the issues surrounding verified gross mass, and it now has a membership of about 140 professionals. But we also know that an open online discussion may not be able to develop concise standards. As part of the initiative, INTTRA also started a working group of top carriers and forwarders with weekly calls to discuss issues like notification timing and third party weighing. The calls are of a strictly noncommercial nature.

Q: How will VGM data be stored and transmitted, and who will regulate VGM?

Kuznetsova: Implementation is up to the signatory states, about 170 to date. In the U.S. the regulatory agency is the Coast Guard. But there is a strong preference for a digital solution within the eVGM Initiative, and based on our conversations with customers, we sense the same holds true across the industry. There is growing recognition that digital VGM submission will keep down costs and reduce errors relative to phone calls and faxes.

INTTRA plans to launch a service to handle the data, but integration, testing, training and business process adjustments will take time and expense. We expect to announce the product in the first quarter of 2016.

Q: In your recent customer survey on VGM, respondents said that they expected the Asia-Pacific region to be the worst hit. Can you tell us why?

Kuznetsova: First, it is top of the charts for shipping volume – it represents half of the activity on our platform. Second, shipping infrastructure is very uneven across Asia. Getting accurate weights for full containers or for container contents may not be easy in some places, especially for bulk cargoes like scrap, which will have to be weighed as a full loaded container. Lastly, some shippers, for example some facilities in Northern China, still may not have reliable internet access for communicating the VGM to carriers.

Q: INTTRA reported significant growth in 2015. Can you tell us why you're getting so much new business?

Kuznetsova: We have seen double digit growth on the platform in 2015, compared to zero to three percent growth in worldwide shipping this year, so we are definitely gaining market share.

We attribute the success to several factors. We have performed a lot of work on improving the portal, with a new interface and an examination of the end-to-end customer experience, resulting in many changes.

There is also a movement in the industry towards embracing electronic transactions and standardization as a way to lower cost. Document management is expensive, so many carriers now charge less if you book through INTTRA rather than by fax or phone. Also, instead of paying for an EDI connection for each carrier, which may cost as much as $40,000 per year, shippers are saving by paying for only one connection to all major carriers through INTTRA.

Plus, INTTRA's new performance dashboards give shippers performance data on their own units and on carrier reliability on different routes. This gives them a new edge with the business analytics for better shipment plans and better predictions for time-sensitive cargo.

Carriers can even use this data to get new business from shippers by showing them their proven past reliability and performance. We have received positive reviews from freight forwarders for being able to create shipment plans on the basis of past results.

Also, INTTRA is expanding its reach in partnership with leading logistics software companies such as JDA Software. Announced in December 2015, the new partnership gave JDA clients access to INTTRA's global ocean shipping marketplace.

Q: Do you see the big container line mergers (COSCO-CSCL, CMA CGM-NOL) changing your business patterns?

Kuznetsova: We have a lot of experience helping our customers manage their bookings when carriers merge – for example, during the merger of Hapag Lloyd and CSAV, when we moved CSAV bookings over in record time. When INTTRA customers of two carriers go through a merger, the experience is relatively seamless. I think we can say that of all the possible complexities of a merger, booking through a multicarrier portal like INTTRA might be the easiest part of the integration.

All four of the lines in the recent merger announcements are INTTRA carriers, as are all of the top 50, and we are ready to help our customers during any further consolidation.