- Machine learning is set to revolutionize the ocean container shipping industry, helping predict future freight rate movements and improve procurement processes.
- Xeneta’s new Ocean Market Rate Outlook provides explainable predictions using 500+ million data points and over 20 parameters, enabling data-driven decision-making in volatile markets.
- Index-linked contracts and in-platform benchmarking tools are becoming critical for navigating freight rate volatility and ensuring fair pricing.
At the Xeneta Summit in Amsterdam, industry leaders were urged to embrace machine learning to navigate the complex and volatile ocean container shipping market. Xeneta’s new platform feature, the Ocean Market Rate Outlook, was unveiled as a powerful tool to predict market movements, reports AJOT.
Introducing the Ocean Market Rate Outlook
In his keynote, Fabio Brocca, Xeneta’s Chief Product Officer, highlighted how machine learning will fundamentally change how freight is bought and sold. He emphasized the role of data in making procurement decisions, especially during periods of volatility like the Covid-19 pandemic or the Red Sea Crisis.
Brocca introduced Xeneta’s Ocean Market Rate Outlook, explaining how it will predict future freight rate movements for up to six months by using machine learning. This product offers explainable predictions and will help procurement professionals make informed decisions amidst market uncertainty.
Leveraging 500+ Million Data Points for Market Predictions
Xeneta’s Ocean Market Rate Outlook utilizes over 500 million freight rate data points, alongside 20+ parameters such as fleet capacity, import/export volumes, and macroeconomic factors like GDP, inflation, and fuel prices to predict market trends.
Combating Volatility in Global Supply Chains
“While nobody can predict Covid-19 or the Red Sea Crisis,” Brocca remarked, Xeneta’s new tool enables procurement professionals to act on predicted market movements.
Xeneta provides market guidance to navigate the inherent uncertainty in global supply chains.
Red Sea Conflict and Its Impact on Freight Rates
The Red Sea conflict has driven spot market rates to spike, with increases exceeding 450% from the Far East to North Europe and nearly 400% to the US West Coast.
This volatility underscores the need for data-driven strategies to manage freight procurement.
Index-Linked Contracts: A Solution for Volatile Markets
Brocca believes index-linked contracts, which adjust freight rates based on market movements, will play a crucial role in the industry moving forward.
These contracts allow businesses to maintain competitive pricing and ensure container shipments during times of disruption.
Enhanced Freight Rate Benchmarking and Transit Time Comparison
In addition to launching the Market Rate Outlook, Xeneta has also introduced enhanced products for industry-specific freight rate benchmarking and transit time comparison across various trade corridors and carriers.
Brocca emphasized that access to the most reliable market data is critical for navigating global supply chains. Whether it’s predicting freight rate trends, benchmarking rates, or utilizing index-linked contracts, Xeneta’s platform provides the necessary tools for strategic decision-making.
Procurement Professionals Empowered by Data-Driven Insights
“Market Rate Outlook explains the assumptions behind its predictions,” Brocca noted, giving procurement professionals the ability to make strategic decisions with confidence.
This data-driven approach will become increasingly fundamental in how freight is procured across the industry.
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Source: AJOT
