Global News Cautious shippers navigate post-pandemic landscape of visibility data tools

Ocean visibility providers are navigating a market that has, in many ways, returned to its pre-pandemic ways.

Despite a seemingly never-ending stream of global disruptions — from attacks in the Red Sea to the Baltimore bridge collapse — shippers have once again become measured about their direct investment into visibility data tools.

Part of the challenge for providers is determining the best path to serve the market, with shippers indicating to the Journal of Commerce that they generally favor accurate data feeds over fancy applications. Shippers also often prefer visibility data to be bundled into a third-party logistics provider’s (3PL’s) broader service offering or integrated within a transportation management system (TMS) they already use, over having a standalone relationship with visibility providers.

Those dynamics are not universal. Some shippers still want a direct relationship with a visibility provider and even want an application to better utilize that data. But the way ocean visibility specialists have targeted commercial relationships with 3PLs is an indication of the way the market is trending. Cost and accuracy Paul Brashier, vice president of drayage and intermodal at nationwide provider ITS Logistics, said two complaints shippers generally have about visibility data are a lack of accuracy and cost. ITS in late 2023 released a visibility product called ContainerAI that it bundles with freight services or offers as a standalone product to shippers.

“On the one side you have large, sophisticated shippers with resources allocated for this,” Brashier said. “They want data, and accurate data they can hold people accountable for. And they want it for the least cost possible.”

On the other side are smaller shippers using 3PLs as a service provider and data platform.

“It’s not just about [container] volume, but ones that don’t have the proficiency in place because they’re used to ‘booking door,’” Brashier said, referring to when the carrier or 3PL manages the drayage move on behalf of the shipper. “You have a movement underway where they want to control that freight and want to hold folks accountable, so they don’t end up in the same place [they were during pandemic-induced congestion].”

Brashier said ContainerAI is an attempt to address those issues because it relies on data that’s used operationally by ITS.

“The standalone providers are not testing the data in the same way [as a 3PL] because they’re not operators,” he said. “If you don’t have operational experience, it’s going to be hard for you to say the data is right 98% of the time. We’re on the hook if 40 containers go into demurrage, so our data has to be on point. And so what we provide to the client has to have that level of redundancy and accuracy.”

On the cost issue, by embedding visibility into its freight services, ITS can provide a competitive price on visibility milestones.

“If I’m providing milestone data along with freight, I can give them milestones I already have to feed into their [business intelligence] tool for no extra charge,” Brashier said. Visibility data as audit tool Gautam Jain, CEO of global TMS provider GoComet, said there’s nuance in the way shippers want to consume and manage visibility data.

“Shippers want 3PLs to manage it, and we see a growing trend to give responsibility to 3PLs, but the shippers want visibility internally,” Jain said. “Milestones like proof of delivery, or [whether] empty containers returned on time. They want the data analytics that goes with those milestones.

“Shippers want 3PLs to have the operational responsibility, but they want audit capability so they can check the performance and put it in future contracts,” he added.

However, some ocean visibility providers disagree that shippers primarily want visibility data channeled through a 3PL.

“There are small, medium and large [beneficial cargo owners (BCOs)], and the larger you are, the more often you’re working with multiple [3PLs],” said Akshay Dodeja, CEO of visibility provider Terminal49. “And so you want to be decoupled from the [3PLs] to have your source of truth.”

Dodeja said, as an example, a large US importer might be getting data from its forwarder, its customs broker and multiple visibility providers for different elements, all funneling into an internal data warehouse it can use for a range of purposes beyond just tracking in-transit shipments.

“So the most sophisticated buyers here, they want to update their source of truth,” he said. “They might still use [a visibility provider’s] tools for very specific tasks, but the way the world is going is more and more cargo owners will have their own source of truth in their data warehouse.” Best of both worlds Kevin Valsi, CEO of visibility provider OpenTrack, said that severing the provision of tracking data from transportation services enables a shipper to shop for the best version of both.

“Since BCOs generally use multiple 3PLs and freight forwarders to find the best service and rates, they prefer to have an independent source of visibility across all service providers,” he said. “They can more effectively control their own data, while having the flexibility of using the best supply chain partners, by lane or area of expertise. It’s also less work — imagine a BCO building integrations with five to six freight forwarders and reformatting all of the inbound data.”

OpenTrack, similar to many visibility providers, works with both BCOs and 3PLs as customers. On the 3PL side, the product is essentially white labeled as a self-service portal for shippers that lets 3PLs cut down on operator hours dedicated to tracking freight milestones and conveying them to shippers.

OpenTrack, for instance, has such a relationship with non-vessel-operating common carrier OW Logistics. Another visibility provider, Vizion, has a similar partnership with freight broker Uber Freight, providing ocean milestones that complement the broker’s existing surface transportation visibility data.

Gnosis Freight, a provider of logistics software, is a key vendor in that ecosystem, providing ocean, terminal and rail milestones direct to shippers, but also to multimodal visibility aggregators and even 3PLs.

“We see varying levels of interest among BCOs in getting visibility data directly from their 3PLs,” said Jake Hoffman, chief technology officer at Gnosis. “To some BCOs, they would rather utilize someone like us — a standalone platform — so that they can continuously evaluate their logistics providers on performance and not become too reliant on them from a digital standpoint. It’s an exercise in de-risking their supply chain so they aren’t too dependent on any one provider.

“At the other end of the spectrum, BCOs strongly believe that good visibility should be a core part of the provider’s offering, and that they shouldn’t have to pay extra for a standalone platform,” he added. “This works well in the cases where a BCO uses one 3PL or forwarder for all of their freight.”

Hoffman said most BCOs have an enterprise resource planning (ERP) system where they need tracking data to update purchase orders with better delivery estimated times of arrival and status updates.

“That’s where we lean on our [application programming interfaces (APIs)] and integration capabilities to get our customers what they need,” he said. Data or a platform? The issue of whether shippers want visibility tied to a 3PL relationship is connected to another issue: whether shippers simply want a data feed or a platform that utilizes that data.

“We started as a data company, but not all of our customers can handle or make sense of such a vast amount of data,” OpenTrack’s Valsi said. “The reality is that ocean freight visibility is so complex that it requires a dedicated software platform to produce the ‘right’ answer — the same answer that a veteran operations team would get from fully understanding the situation and comparing the data from multiple sources. It’s one thing to get the data right, but it’s even more important to deliver a solution to real persistent problems.”

Hoffman, too, said most customers need help contextualizing the data even if it’s accurate.

“I think the market is trending toward better data, but data can only get you so far,” he said. “We can turn on a fire hose of container milestone events for our shipper customers, but then what? They would need the proper infrastructure in place to sort, filter and identify exceptions. That’s where we are doubling down on the software itself, allowing our customers to actually do their jobs.”

Jain, meanwhile, said a bifurcation is happening where a shipper’s internal team purely wants data, but it uses an external platform to serve everyone outside that logistic team.

“The increasing trend is the input and output data that goes into APIs for PowerBI and ERPs,” he said. “But they want their consignees to be using a platform. They want a dashboard for their stakeholders.”