Freight Payment
Special Report
Rate management hasn ’ t been aligned with invoice audit because the software is geared toward forwarders , not shippers . Shutterstock . com
The idea of using rate management to minimize invoice errors for shippers seems logical in theory , but in practice , it ’ s been inhibited by the reality that rate management software has mostly been sold to forwarders , not shippers .
“ Traditionally , rate management tools have been aimed mainly at freight forwarders ,” said Graham Parker , CEO of Ship Angel , which sells rate management tools specifically to beneficial cargo owners ( BCOs ). “ That makes sense , because if you ’ re a forwarder you have everyone ’ s rates to manage . If you ’ re a BCO , you only have your own rates .”
But Parker , who launched Ship Angel in 2023 , said an important aspect of digitalizing logistics is weaning shippers off a reliance on Excel spreadsheets to manage rates .
“ We kept hearing about advancements in procurement and visibility but there ’ s this piece in the middle where shippers are managing rates , and of the 100 shippers we spoke to when we were researching the industry , 82 were using Excel , and I was blown away ,” he said .
“ Sitting with a lot of shippers , rates have become more complicated , with more surcharges , and rates in multiple currencies ,” Parker added . “ When you try to manage that in Excel , it just becomes too difficult .”
Parker related a story of watching a shipper access its rates from forwarders and container lines .
“ They would click on the file and there would be week numbers , one to 52 ,” he said . “ They would click on week seven and there would be 15 rate files , and an Excel [ spreadsheet ] compiling those 15 rate files , just for that week . And it was clear it was getting too complex for them to understand what the rate was , what the surcharges were and how you pick the best option .
“ If you ’ re looking at a large Excel sheet and you ’ re trying to find the fastest transit , or if the rate is good versus a benchmark , or to measure CO2 between two sailings , it ’ s impossible to do that in Excel ,” he added .
Rate to invoice digitization
Parker said moving rate management for shippers from Excel to a more intuitive web-based platform is part of a larger transition that he called “ the unbundling of Excel ,” with a prime example being how Salesforce took customer relationship management ( CRM ) from Excel to specialized software .
“ Now everybody uses a CRM instead of a spreadsheet ,” he said . “ You ’ ve had a similar journey with project management tools like Asana .”
That digitization would translate into a more efficient invoice auditing and payment process for shippers
“ Rates have become more complicated ... When you try to manage that in Excel , it just becomes too difficult .”
because a shipper could then compare an incoming invoice with a digitized contract rate or confirmed spot quote from the rate management system . In that scenario , data from the invoice would be extracted and digitized by software so that it was comparable to the data in the rate management system .
Raghav Viswanathan , CEO of rate management software vendor Freightify , said there has been demand from his customers to build invoice auditing capability using just that process . Freightify primarily sells to forwarders , but the product could theoretically be used by shippers as well .
36 Journal of Commerce | February 12 , 2024 www . joc . com