Technology does more than provide an easy solution to a shipper’s or BCO’s most immediate challenges. It also sets up their business for success with broader benefits. Striving for increased visibility also gives shippers the insight to be more effective and agile in managing operations. Container allocation is one such application that demands a modern technology solution, given the possible visibility at other points in the supply chain. Yet the processes of managing container allocation are often inefficient, especially when dealing with disruptions and evaluating carrier performance. Through digitizing freight workflows, including booking and container allocation, shippers get immediate internal benefits, like time-savings, and the ability to improve their resiliency moving forward.
What is Container Allocation Management?
Container allocation means different things for different parties, but for the shipper or BCO, it refers to how they distribute their shipping volume to various carriers. Shippers often base allocation decisions on their annual contracts with carriers and how they can best utilize this space in combination with short-term agreements. Once made, these decisions pave the way for assigning purchase order details to shipping orders. Subsequently, containers get filled and loaded onto vessels destined for another port and then on to the shipper’s warehouse.
The Challenges of Managing Allocations in Container Shipping
Container allocation management is not as simple as it may seem, given the number of problems or disruptions likely to be encountered. With any issues, it takes the shipper added time and effort to investigate and correct the situation. Container allocation can become a black box for many shippers without clarity or even visibility into handling their shipments. They must track shipments and the carrier’s performance to compare their agreements with the service levels they receive. Without a digital system to do this, it’s a significant source of waste in terms of time and resources.
The lack of visibility into a carrier’s performance presents its own challenges down the line. If the shipper doesn’t know which carriers are reliable and which tend to result in delays, they’ll run into compounding supply chain problems. Carriers may change the vessel schedule (including cancellations), roll the shipper’s cargo, or encounter bottlenecks with the pickup of empty containers. Shippers must be able to see these updates promptly to respond and mitigate the risk associated.
These challenges call for a digitized system that allows data to be shared more readily from the carrier and container to the shipper. Automation would create efficiency in shipment processes and, more importantly, visibility. With visibility, shippers can make informed decisions that impact their supply chains and improve communication with those around them, including vendors and customers.
The Benefits of Improved Container Allocation Management
Access to data increases visibility and eliminates many of the container allocation challenges experienced by shippers. This leads to process improvements for their operations, better container allocation management in the future, and ultimately greater agility for their business.
Shippers get the data they need for improving carrier conversations — knowing what they need to include in their agreements to clarify the services they receive and get on the same page with handling potential changes and delays. They have data on past performance and milestone events to identify points of weakness in the shipment process. If a container misses a sailing, can the issue be traced back to a specific problem, either on the carrier’s side or the shipper’s? With more data, shippers can find the underlying cause of issues more efficiently, without time-consuming, manual work, and there is less chance of mistakes and incorrect assumptions regarding the process.
With digitization, freight processes can avoid the familiar sources of friction that prevent the timely resolution of issues. It streamlines container allocation, among other workflows, to require less time and resources for a more reliable and accurate outcome. One result is cost savings — reducing shipping expenses — and avoiding supply chain issues that can cost the shipper corporation.
Achieve Greater Container Visibility with VIZION
A shipper with better visibility into their supply chain processes and the transportation of containers gains insight that can improve the agility and resiliency of the business when disruptions occur. They can mitigate risk faster and more effectively with complete and reliable data, including container events as real-time updates and alerts. VIZION offers shippers and BCOs an easy-to-implement API that can transform blind spots into digitization and transparency. To learn more about VIZION"s API, contact us today to book a demo.