Allocation is the space an importer or freight forwarder reserves on a carrier. That space is allocated (hence the term “allocation”) to the client. It sort of guarantees space on a vessel and the terms are documented in contract Service Level Agreements (SLAs) with the shipping lines. Supply chains operate on bespoke planning and execution, so importers strive to reserve space at the best possible price, with the guarantees to have enough space reserved. Contracts are typically negotiated for 12 months.
Today many importers still manage allocation manually. This is a heavy process that requires:
Accessing carrier websites
Moving information manually into spreadsheets
Frequent email communication with carriers using these spreadsheets
Trying to keep data between unconnected sources accurate
Trying to manually track used-up allocation
Allocation management software helps businesses reduce time investment and human error connected with endless emails and tangled spreadsheets. Software addresses two business models that are often promoted similarly but are actually very different.
It aligns to the needs of mid to large companies with team members dedicated to specific transport modes. Single-mode solutions can be plugged into multi-mode platforms but as we all know, trying to manage one set of KPI’s through multiple systems is a bumpy process.
Cargoo’s allocation management seamlessly integrates ocean freight supply chain processes for ocean freight:
Involves tendering and securing carrier allocations at optimal rates, followed by auditing carrier invoices to ensure they align with contract terms.
Focuses on ordering from suppliers and planning the most cost-effective delivery of those orders to the importer.
Handles the execution of Shipping Instructions with the help of supply chain partners (suppliers, carriers, customs, port authorities) while consolidating documentation into one tool for easy sharing.
Provides Supply Chain managers the dashboards and reports with key metrics such as Container Capacity Utilization (CCU), ETA Tracking, Detention and Demurrage (DnD), and Allocation Consumption. Cargoo supports Supply Chain leaders to enhance reports answer difficult “why” questions, and optimize processes.
A key differentiator for Cargoo is its ability to leverage planning and procurement data (including all carrier conditions) in the execution steps. For instance, shipment reports use SKU-level details from PO’s. This allows clients to drill down container content to the SKU level, providing precise visibility into where inventory is.
Cargoo can support clients to create interactive dashboards where every dashboard element interacts with all underlying data. Simply click to drill down.
Beneficial Cargo Owners (BCOs) can gain several key advantages through effective allocation management, including:
Securing annual space requirements enables companies to negotiate better shipping rates. By tracking remaining allocation on each shipping lane, businesses can avoid extra costs, such as penalties or expensive last-minute spot bookings. Fulfilling the agreed terms is key to a successful partnership with the shipping lines.
Clear oversight of contracts, rates, and allocation allows supply chain managers to better coordinate with partners, minimizing errors and reducing delays.
Knowing the exact remaining allocation across all lanes allows for faster decision-making when disruptions occur.
Ensure accurate invoicing by matching carrier invoices with contract terms, helping to prevent overbilling.
A single platform for seamless collaboration with all supply chain partners, including Electronic Data Interchange (EDI) connectivity with ocean carriers. This ensures real-time, accurate data from a single source of truth.
Customizable reports by location, carrier, or timeframe, offering detailed insights into completed or at-risk bookings. Advanced platforms include reporting “owned” carrier contracts or contracts negotiated by freight brokers.
A single platform for seamless collaboration with all supply chain partners, including Electronic Data Interchange (EDI) connectivity with ocean carriers. This ensures real-time, accurate data from a single source of truth.
Customizable reports by location, carrier, or timeframe, offering detailed insights into completed or at-risk bookings. Advanced platforms include reporting “owned” carrier contracts or contracts negotiated by freight brokers.
Cargoo clients have noted significant improvements in their supply chain operations. Below are examples of client feedback, expressed through both measurable results and qualitative statements.
reduction in the time required for Shipping Instruction submissions (see more)
fewer emails when updating clients (see more)
Within one year of using Cargoo, a large BCO improved its booking compliance with carrier contract conditions from less than 30% to over 70%.
Cargoo allows Supply Chain leaders to delegate tasks to any supply chain partner (e.g. the forwarder, the supplier, the wholesaler, etc.). One innovative client delegates bookings to a partner that is not a forwarder, thus removing a step in their supply chain and pocketing the margin. Shipments are still executed under the client’s contract rates, and the client retains full visibility throughout the process.
In conclusion, an effective allocation management tool for ocean freight should offer pre-configured features that minimize setup time, detailed customizations to fit specific business needs, and collaborative capabilities for real-time data sharing across the supply chain. Additionally, flexible reporting and the ability to delegate tasks while maintaining control are essential for optimizing operations and reducing costs.
TEU’s processed / day
*(as of 30.07.2024)
Shipments processed / day
Lanes covered
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