Freightos expanded the capabilities of its digital freight booking and payment platform by adding a tool that enables dynamic contract pricing that automatically adjusts to market fluctuations.
The new Freightos Index Linking Toolkit helps importers, exporters, freight forwarders and carriers manage stable freight contracts by ensuring competitive pricing and eliminating the need to renegotiate rates when rates increase or decrease, the company said in a Tuesday (Feb. 18) press release.
“Logistics teams, already stretched thin, are now renegotiating freight contracts quarterly instead of annually due to ongoing disruptions,” Freightos Vice President Market Data Anton Barr said in the release. “In this volatile environment, ocean freight index linking is becoming more essential than ever.”
The Freightos Index Linking Toolkit’s index-linking is based on two of the company’s indexes, including a global container index called the Freightos Baltic Index and an air cargo index called the Freightos Air Index, according to the release.
These are combined with hedging via freight future agreements on the Chicago Mercantile Exchange and the Singapore Exchange to help carriers, forwarders and beneficial cargo owners reduce freight pricing exposure and improve internal efficiency, the release said.
Bjorn Vang Jensen, executive vice president and global head of ocean at Easy Speed International Logistics, said in the release that “a long-term stable rate contract is a near-perfect hedge.”
“Shippers are always looking for better ways to procure freight, secure space and, most importantly, bring some predictability to the process,” Vang Jensen said. “Index-linked contracts do just that — they help both sides get a good deal while freeing up time and energy for more productive work.”
The transportation, logistics and shipping business has undergone a foundational shift to become increasingly digital, with companies moving away from Excel spreadsheets to online platforms, according to the PYMNTS Intelligence report “Accounts Payable Automation: Transportation Companies Innovate to Drive Growth.”
Meanwhile, Freightos said in August that it acquired freight-tender procurement platform Shipsta to provide its importer, exporter, forwarder and carrier customers with comprehensive solutions beyond spot freight bookings and sales.
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