Author: Niklas Vesely
Why does Listthe suggest Freightos?
Email: niklas at listthe dot com
Location: Guangzhou, China
Date: August 25th, 2019
Listthe connects companies with everything they need to arrange great productions.
Most productions are arranged by Chinese factories. For Listthe's users this means that they do not only have to arrange a production, but also the freight from China to their country. This means not only finding the best manufacturer, but also the best shipping company. This is where we suggest Freightos
Factories are not shipping companies!
Factories do not like to quote their productions including delivery. Factories specialize in manufacturing and not in international shipping. On top of this, factories will have less trust in your business skills if you ask them to manage your freight - they expect professional companies to work with specialized freight forwarders.
ExWorks VS FOB
Factories do quote productions under the Incoterm FOB. “FOB” means, that the factory will manufacture the goods and arrange the transport from their warehouse to the harbor and onto the ship of your shipping company. However again, factories are no freight forwarders. They do not specialize in arranging local transports, nor do they know the most suitable local freight forwarder to do so. This means that they will first add their profit margin on the local delivery cost, then add a safety margin because they don’t yet know the local delivery price, and lastly they will receive and add a bad price for the local delivery based on their inexperience arranging transportations. All of these costs will be added into your product price.
Who can arrange the best delivery?
Shipping companies that specialize on your required route can arrange the safest, fastest and cheapest transportation. From the factory onto the ship, over the ocean, and to your warehouse. Shipping companies, inexperienced in working with the country you ordered from will ask you to get the goods delivered on board (FOB). However shipping companies that specialize on your required route have local offices or strong business parters in both the country of departure as well as the country of arrival. Even more specialized shipping companies have offices near your manufacturer and an office in your city. Let’s take MBS for example; If I would want to ship from Shenzhen China to Köln Germany, they would have offices in both cities. This leads to great economy of scale - meaning that the goods can be picked up from the factory without any difficulties or delays, a ship is leaving every week, and even the delivery will be very easy.
However finding a shipping company that specializes on your route can be a difficult task, taking weeks or months.
Collecting quotes from shipping companies
Shipping companies receive tons of price inquiries. To reduce their work load, they have to focus on the most promising inquiries. If you haven’t worked with a shipping company before, they might regard your inquiry as less promising and not have the time to answer. Also small quantities and less than full container load inquiries often stay unanswered. This is especially the case for shipping companies that offer the lowest prices. To get price offers, you will have to keep calling and sending reminders. And still you will need to wait at least one week per price offer.
After looking at Freightos
, I believe that their software is the solution to the mentioned problems. By entering your manufacturer’s address and your own address, Freightos
can automatically identify the shipping companies that are most experienced in this route. By entering your order quantity, Freightos
can add or deduct shipping companies based on if they only do full container loads FCL or also less than full container loads LCL. Lastly, by having automated the shipping companies price calculations, Freightos
can make price offers in real time. This means that everyone can receive a price offer, no matter the quantity and without the need of sending constant reminders.
My experience with Freightos
I believe it was an email from Freightos
, reaching out to exhibitors of the ISPO fair in Munich which first introduced me to their service 2 years ago. I have been arranging shipments from and to China for over ten years and I now ship containers on a monthly basis. For my routes, I already have great cooperations with 3 specialized shipping companies. However once, 3 weeks before Chinese new year, none of my shipping partners answered their emails nor did they send out the promised quotations after getting off the phone calls. The shipping companies ran into trouble managing their incoming orders, because a big part of their clients wanted their goods to leave China before all local businesses close for Chinese new year holidays. It was at this time, that Freightos
came in extremely handy - as always Freightos
showed over 5 shipping quotations of different shipping companies within seconds. I forwarded the best price offer to my shipping company and said, that I would switch to Freightos
. My shipping partner relented and a shipment at the usual conditions was arranged. This lead me to not yet arranging a shipment through Freightos
yet. Send me an email if you have worked with Freightos
. Once I have collected a representative number of feedbacks, I will share the result in this Blog.
Freight prices on Freightos
offers good freight prices. I have been comparing freight prices and shipping companies for many years. After login into Freightos
, similar prices as I get from my long-term-forwarding-partners were offered without the need of negotiating.