Executive Insights: CoLoadX CEO Fauad Shariff on giving shippers and forwarders what they really want
It’s never been easier to ship, and supply chain services and technology are improving every day, but that doesn’t mean that there won’t be turbulence ahead, or that there’s no room for improvement. Mid-market and smaller shippers often lack adequate tools for price discovery and shipping transaction management. That keeps many of them out of the sector, and drives up their operating costs in a way that stunts long-term growth.
After two decades of experience in export and freight forwarding sectors, CoLoadX CEO Fauad Shariff has seen it all. In his current position at the helm of a marketplace for freight forwarders and NVOCCs, he’s trying to help freight forwarders solve the complexities of international logistics, rather than waste time and effort shopping for rates, or tracking shipments.
Shipping and Freight Resource: Can you explain your business model, and how it’s different from other operations in your sector?
Fauad Shariff: CoLoadX is a marketplace for freight forwarders and NVOCCs only. We do not sell to shippers and we do not sign contracts with steamship lines. This enables us to act as a neutral market maker for the key stakeholders in the international logistics market. Freight forwarders are able to participate in the marketplace with no cost of membership and NVOCC’s can sell their container services without incurring any up front or fixed costs of sales.
What sort of technology and know-how do shippers need to gain a competitive edge in this market?
We believe that shippers are generally well automated at the highest end of the market. Mid-market and smaller shippers tend to lack adequate tools for price discovery and shipping transaction management. As a result, many of them simply opt out of the international shipping process, preferring instead to sell on an ex-works basis, and others just accept the status quo, continuing to expend great effort and energy in managing freight procurement and transaction execution.
With trade wars on the horizon, what advice do you have for shippers and forwarders looking to ensure their long term profitability?
Automation of processes that do not have high value is always a must, irrespective of changing business environments. Should freight forwarders maintain separate teams for pricing, booking and execution of shipments? Perhaps yes, but clearly not for those aspects of the process that are of low value. This enables them to re-focus manpower and other resources on high value, high margin business opportunities. Freight forwarders, in particular, excel at solving the complexities of international logistics, but usually spend too much time and effort on shopping for rates, or tracking shipments. Very often the true yield of these service components does not justify the time or money dedicated to them.
How does your background as a freight forwarder influence the way your current company is structured?
We’ve “lived the pain” so to speak. We’ve worked on RFP’s that were merely a “race to 2nd place”. We’ve negotiated rates with carriers only to find that contracts were worthless within weeks and were forced back into rate shopping. We’ve seen the competitive advantage of freight forwarders shift from one based on performance to one based on discounting and extending credit. Above all, we’ve seen that the existing technologies available to freight forwarders did very little to improve sales and revenue growth or to reduce fixed transaction costs in any meaningful way.
Where are the biggest pain points in the shipping industry, and how does your company address them?
Ocean shipping & logistics as it exists today is slow, rigid and fundamentally incapable of meeting the demands of a retail environment that is being increasingly driven by e-commerce or digital business. This isn’t the “fault” of any one stakeholder in the process, rather it’s the result of a legacy business model that has reached it’s sustainable limit. At CoLoadX we believe that the internet has created incredible opportunities for visibility and opportunity for all stakeholders in banking, travel and entertainment and it’s our goal to deliver those same solutions to the logistics industry. For us it all begins with establishing a platform that meets the needs of the only parties who actually excel at managing international logistics…not to find some way to take them out of the process.
Where are shippers facing the highest costs, and what steps can they take to reduce their shipping and logistics costs?
Shipping rates are reasonable and vary with trade flows. The true costs that shippers face come from inadequate data flows, and are worsened by the lack of data transmission standards. Investing in solutions that methodically expedite specific processes within their supply chain will yield favorable results for them over time. In fact, when dealing with an industry as vast as logistics where the aggregate worldwide spend exceeds $3.5 Trillion annually, there is not going to be a “silver bullet” that can solve their problems, rather a continuous process of iteration and improvement is the best way to keep costs (price or otherwise) under control in the future.
How are digital logistics companies such as CoLoadX ensuring cooperation and communication with their clients?
Current technologies such as API’s are helping bridge the communications gap in the logistics industry and over time they will get the stakeholders off EDI, email and other complex or unstructured communication channels. At CoLoadX our goal is to make sure our customers are able to engage in their essential communications surrounding pricing, booking and visibility in an environment that is as easy to use as any e-commerce retail website.
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