Wise Choices for Intelligent Software
By Lars Fischer
Although the worst of the current market downturn seem to be behind us, tough times still prevail and persistent low freight rates are causing pain for containership operators. That’s why carriers are continually seeking ways to reduce overhead, increase efficiency and remain competitive. Information technology coupled with intelligent software solutions are in demand to help solve some of the common pain points being felt across the sector. Carriers are looking to use technology to streamline routine processes that carry a high administrative burden and which are prone to error. At the same time, many carriers complain they have an inability to check that slots and boxes are available at the time of booking; they have problems calculating the likely profit margin when taking an order; they lose track of container movements; they cannot optimize their cargo mix; and their invoicing is inefficient resulting in revenue leakage. These are just some of the common business problems that good software can help alleviate.
Gone are the days when implementing a software solution was a mammoth task requiring huge effort and great expense. Modern software is relatively inexpensive and comes with a proven track record. It is available as a packaged solution with a built-in capability to be customized to suit the intricacies of each individual carrier. It is also modular meaning that a carrier (and its agents) may select which applications they need to automate certain processes within their business. They do this in the knowledge that each module seamlessly integrates with the others to facilitate a flow of information across the company. Data need only be input once which reduces duplication, errors and confusion.
Software can also bring some much needed visibility and transparency to daily operations. Take the common problem of calculating the profitability of a booking: A well thought out software application will retrieve variable costs per shipment from a cost database and apply these as estimated costs to the booking. Information on volumes taken from the customer at the time of booking are automatically linked to this data to provide analysis and profitability assessments for each consignment – whilst the customer is still on the phone. And, as the voyage progresses and actual costs become known, real-time up-dates can be delivered.
Invoicing and credit control represents an enormous undertaking for a containership operator and demurrage and detention issues often create special difficulties. Good software will automatically calculate and issue regular demurrage and detention invoices to clients on the premise that small, regular invoices are easier to handle locally. Demands for large amounts often require “head office” approval. Across the industry, around 20 demurrage and detention days per annum per box are lost as a result of poor administration or through carriers not wanting to upset customers by presenting large bills. Software alleviates this problem.
But as containerships get bigger, so the administrative headache intensifies. Some of the larger boxships are now exceeding 18,000TEU but the window in which the back-office has to process the loading and off-loading of the boxes is only a little wider than that allowed for smaller vessels. This means that an already over-stretched office will be required to process many more bookings, documents, invoices, container releases and customs declarations within a very tight time-frame. This is already impacting negatively on customer service according to a recent industry survey where accuracy of invoices and the issuing of timely bills of lading were pinpointed as recurring problems.
Using software to automate these processes is the only realistic solution. Not only does it speed up the process, it will reduce errors and omissions that inevitably creep in when manually processing such large amounts of data. Valuable validation protocols can also be built-in as good software will continually be asking questions such as “Is this my container?” “Is this a valid container move?”, “Does the bill of lading and booking information match the information held on my system?” Clever software will also generate prompts to ensure the terminal receives the required information on time – this prevents unwanted penalties often awarded by terminals for late reporting.
A modern day container carrier cannot operate effectively without a solid IT infrastructure. But the difference between operating competitively, efficiently and profitably is often a function of the level of intelligence that is built into the software solution that the carrier has chosen to operate. Selecting the optimum software solution is important and so it pays to choose wisely.
Lars Fischer is Managing Director of Softship Data Processing Ltd, Singapore, a wholly-owned subsidiary of Softship AG, the leading provider of software solutions to the international liner shipping sector. www.softship.com