Harnessing data to optimise freight pricing
In the dynamic world of commercial shipping, understanding risk is crucial for strategic decision-making, especially in relation to optimising freight pricing. The use of tools like PortLog, a pre-fixture data and risk management platform leveraging 38.2m digitised port events, has become essential for ship owners and operators looking to reduce the discrepancy between the estimated versus the actual P&L of a voyage.
This necessity was emphasised during the recent agri-commodities session at Geneva Dry 2024, where industry leaders from Pacific Basin and Norden discussed the profound impact of these technologies on maritime logistics. Representatives from Pacific Basin and Norden underscored the importance of data in pricing risk.
In the context of maritime logistics, pricing risk involves accounting for various uncertainties such as weather conditions, port delays, and geopolitical circumstances. The ability to price these risks accurately is particularly vital for weather-sensitive cargos like grains, where the voyage P&L may be significantly impacted by adverse weather events in port.
How companies like Pacific Basin and Norden are using data-driven strategies to maintain a competitive edge
PortLog provides a platform that integrates extensive maritime port data at terminal level, offering insights that can predict the most likely terminal and estimate the laytime impact of a port call on the voyage P&L. This enables chartering managers and freight traders to predict with higher accuracy whether they will go on despatch or demurrage.
By utilising comprehensive data systems like PortLog, companies like Pacific Basin and Norden can obtain a granular understanding of port costs, time in port, and terminal restrictions. This information is crucial for making more informed fixture decisions at the pre-fixture stage and reduce revisions of estimated versus actual voyage results.
The competitive edge gained through data-driven strategies cannot be overstated. In an industry where timing and efficiency are paramount, having access to a tool like PortLog that provides detailed analytics on port costs, turnaround times and restrictions gives companies the ability to outperform competitors who may still rely on more traditional methods of sourcing data, such as reaching out to individual agents for every single voyage calculation.
By integrating these advanced data tools into their operational framework, they leverage deep, data-driven insights into the latent demurrage-related P&L risk in a potential new trade, providing support to frontline commercial teams. Fewer and fewer chartering managers or freight traders are spending the early years of their career painstakingly performing laytime calculations. PortLog bridges this experience gap by enabling laytime simulations based on actual charterparty terms instead of flat SHEX factors.
