TRAVELLING BY SHIP WAS NEVER SO EASY
October 1, 2000 By Pulp & Paper Canada
Move over Britannia, GoCargo.com, Inc. is aiming to rule the waves. With most of Canada’s pulp and paper production exported, arranging for long-distance transportation can be a time-consuming proposi…
Move over Britannia, GoCargo.com, Inc. is aiming to rule the waves. With most of Canada’s pulp and paper production exported, arranging for long-distance transportation can be a time-consuming proposition and it doesn’t come cheap. Negotiating a deal — calling carriers, arranging pick-up and delivery dates, getting quotes, locking in passage — can take weeks.
Now, through E-business, GoCargo claims to be able to provide the same service in a matter of hours. Founded in July 1999 and online globally since December 1999, GoCargo has more than 12 000 members (companies that want to ship, including International Paper) and 1500 carriers. GoCargo connects importers and exporters with service providers in a reverse auction format. It deals with international container shipments. As Marc Rappaport, vice-president, trading and operations, said, if it goes over water, then it can go on the GoCargo exchange. If a truck/rail move needs to be associated with it, it also becomes part of the auction.
The shipper enters its specifications using GoCargo’s menus to construct a customized contract to offer for auction. The shipper can auction full container loads or less than container loads as well as long-term contracts. Shippers use a single entry to post ready-to-go shipments and secure bids from multiple-service providers. Competing bids from qualified providers are posted on the Web site.
Service providers can segment the cargo available online by more than 20 criteria — trade route, commodity, container type. These service providers may give several bids for a shipment to offer different logistics solutions or improve their price and/or service offerings.
The shipper has full discretion in choosing the winning bid. It may choose by price, time or best logistics solution. The carrier’s identification is not shown to its competitors at any time during the bidding process.
What participants don’t see is all that goes on behind the scenes. The GoCargo team has more than 20 account managers, working with either the shippers or carriers. Therefore, Rappaport said, “The forces of the buy side and sell side are kept independent.” The international trading desk team can work in several languages.
Membership to the GoCargo service is free of charge to the shipper. The winning bidder pays a commission to GoCargo. “Because we are a low-cost platform to the carriers, we are actually a cost saver in the end for them,” Rappaport said. “In some cases, we’re seen as an additional sales force to the carriers.” The company specializes in container shipments but will do free standing merchandise as well.
“In no time, you could have 10 to 20 carriers, not just two or three,” Rappaport noted, “because the global universe is invited to participate. There is more choice and more speed because of E-commerce. Carriers have a real time market idea of rates.”
Although he had no statistics, Rappaport said pulp and paper shipments index very highly compared to other commodities with an above average level of booking. He also claimed that the company was almost two years ahead of its business plan. The reasons are varied. “It is right for the time for many of the industries we cover.” He also said that there is more capacity available on North American export trade lanes versus the import lanes. Because of this, there is a heightened interest.
One of the keys to GoCargo’s success is that it allows participants to look at the tables with all the prices and all the elements involved in those prices along with transport time. “It makes it easy for shippers and carriers,” Rappaport added. “There is no ‘tooing and froing’.”
Rappaport noted that small and medium size shippers will save money on shipping charges. Large shippers are usually getting the best rates possible already. This type of service is designed to help them save time. “If you can offload the chore of all the rate negotiations onto the shoulders of the exchange, you save a lot of time and that equals a lot of money.”
Rappaport stressed that no “test” or potential shipments are allowed. Every one is real and ready to go or it is not allowed on the exchange. Therefore, shippers can’t “test the waters” for rates, etc. “This maintains the robust nature of the bidding. Carriers like it because it keeps them more efficient.” Carriers may also look for specific products that fit their ships. They can drive the business they want on a pro-active basis.
As the service advances, Rappaport hopes to offer ancillary services to GoCargo members and develop additional revenue streams.
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