Digital freight forwarding platform Shifl announced Monday it is launching its own rate index to bring better visibility to its customers that have been experiencing a volatile market, with rates that were close to $20,000 for a full 40-foot high cube this time last year dropping to below $10,000.
The new ocean spot rate index, Shifex, is based on actual freight quotes and shipments handled by Shifl with its carrier network moving cargo from China to New Jersey/New York or Los Angeles.
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Customers can see three-, six-, 12- and eighteen-month ocean freight rate trends for 40-foot general purpose, high cube and other common container sizes.
Shabsie Levy, the founder and CEO of Shifl, said it was important to create an index like this for better transparency into his freight forwarding business’ pricing capabilities, as many new customers come to him after overpaying with less transparent forwarders.
“It is very unfortunate, but when freight rates are so volatile, we find situations where companies are overpaying on freight by thousands of dollars,” said Levy. “If a market is going from a $20,000 rate and within a week or two it drops to $15,000, not everyone is going to be ahead of that curve.”
While Levy noted that there are a number of indexes available to gauge ocean shipping rates, there were not freight forwarder indexes.
“Everything out there is based on fixed rates, which is not applicable for a large population of shippers that are writing their own spot rates. There are indices of multiple forwarders’ data but we found they weren’t indicative of the actual rates we were booking at,” said Levy.
“With a combination of confirmed quotes and active shipments, we are building a bird’s-eye view into the market,” he said.
Levy explained that over time, Shifl plans on adding more lanes, likely from European, Vietnamese and Indian ports. But the company will continue to give small shippers that use freight forwarders a chance to receive the competitive prices large shippers are used to receiving.
“Large shippers are given opportunities to protect when prices go too high and are able to negotiate lower rates when spot rates go under their contract rates. It’s a pity because a regular average shipper does not have that luxury,” Levy said. “Shifex has tremendous insight and we hope to inspire other freight forwarders to come out, be transparent about pricing and move this industry forward.”
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