• Back to Case Studies

Overseas Shippers Association (OSA)

The Client

The Overseas Shippers Association (OSA) was established in 1994 as a spin-off from the Overseas Moving Network International (Omni). The organization has 13 direct members, which are international moving and relocation companies, and their 150 agents.

Based in the UK, OSA is a non-profit organization dedicated to helping its members negotiate effectively with liner shipping companies to move household and commercial goods across six continents. OSA's main service is to provide competitive transportation rates for its members.

"Our aim is to provide multi-carrier options for each trade lane and different service attributes. Part of this process is a post audit and review to determine that carriers are providing stated rates to members. We also act as an intermediary with carriers to assure customers get agreed-upon rates," said Oliver Ward, OSA Commercial Director.

Since 2001, OSA has grown from 26,000 TEUs annually to almost 40,000 and is growing steadily. Explained Ward, "We attribute that growth to the fact that some of the lines we work with have come to accept our concept and are providing us with a broader spread of competitive rates in our tender. That means we're able to book into more members worldwide than before."

The Business Need

Without OSA, 150 companies would have to handle tenders on their own, working with numerous carriers and trying to process thousands of trade lanes. OSA handles requests from its members and works with 20 to 30 carriers annually on their behalf, according to Paul Felton, OSA Commercial Manager. That amounts to over 20,000 lane requests annually.

OSA members don't secure their own quotes and OSA doesn't serve them individually, says Ward. "We go out in block in January annually for tender and supply the rates that begin on March 1. Members can view the rates on our Web site. Ninety-nine percent of the time they have been negotiated. When rates have not been negotiated members have these options:  OSA will negotiate on our members' behalf; they can go directly to the carriers and use the OSA tender information to seek rates for themselves, or they can ask carriers to improve on the posted tender," he said.
 
"It's important that OSA not only capture rates for existing trade lanes or volumes, but anticipate quote requirements from their members for lanes where they haven't shipped before. This gives OSA some significant challenges in trying to develop a price book with global coverage for all the major trade lanes, but at the same time not trying to create rates from everywhere to everywhere worldwide," Felton adds.

Why OSA chose INTTRA’s Tender

According to Felton, the tender process -- which includes modifications from year to year -- has "created great challenges for OSA as tenders require multiple rounds of counter rates from our carriers. All of this has to occur from a three-month cycle from the beginning of the cycle to signing agreements."

Moreover, shipping lines do not always work in the parameters of electronic formats, adding surcharges that Felton had not anticipated.  So three years ago he sought assistance for his members from INTTRA, the world's largest e-commerce portal for ocean freight. INTTRA experts have worked with Felton to refine OSA's tender process, which requires flexibility to accommodate constantly shifting rates that makes speed of the essence.

"INTTRA's analysis tool allows us to quickly evaluate our carrier responses based on the evaluation criteria we select. That can be carrier rate, total rate or even carrier services. We then use the tool to upload our target rates or nominations to our carriers," Felton said.

INTTRA’s Offer

INTTRA Tender helps Felton forward his members' tenders to carriers, which he says has made the process far more flexible. "OSA members then make bookings with the carriers based on the rates I've secured through the tender process. Tender standardizes the process across the shipping lines. It's simple to use to create and manage tenders. You don't have to work in 10 different processes, just one, and it's free," says Felton.

He adds that each year OSA has modified the structure and format to try to meet their member's needs. "This has required that we send as few as 20,000 and as many as 100,000-plus lane requests to our carriers based on our need to have varying degrees of detail for inland or arbitrary moves from the major ports we serve. INTTRA tender is flexible enough to allow us to design such varying tender complexities within the scope as we see fit."

(See section below on Product Benefits)

The Next Step

"We know they're going to the tender next year and continue to refine the process based on carrier input. Three years ago OSA showed tremendous foresight in seeing the advantages of an industry standard tendering process when they selected INTTRA Tender. INTTRA Tender gives them the flexibility to refine and modify the electronic tender process," said Gary Chisamore, INTTRA Tenders Group Manager

As OSA builds up more expertise using INTTRA’s Tender tool, Felton and Ward says they’re getting positive feedback from INTTRA carriers that are encouraged by the results of this automated process. All parties are pleased with the fact that the process is streamlined and there are checks and balances providing more accurate data.

According to Chisamore, many of the carriers he reaches are considering the possibility of creating automated links to INTTRA Tender “when the adoption justifies it. We’re hoping to see that happen by 2007 as the carriers would love to automate those links.”

Product Benefits Function-by-Function

"Over the years INTTRA tender has made some tremendous strides especially in the areas of technology, import/export of data to the INTTRA platform and speed of processing while at the same time providing features aimed at both shippers or carriers," says Chisamore.

Felton has found it easier to use INTTRA's tender with each succeeding year. As with all tender processes, he faces the option of staying flexible in terms of carrier surcharges or settling for a fixed rate. It's a constant balancing act, but Chisamore says INTTRA provides the flexibility Felton needs to go either way. "The value of tender is flexibility and that customers can design their own format. INTTRA has been able to accommodate all the options he's chosen," he said.

Tender provides a wide variety of functions. The following are ways OSA is taking advantage of this product:

• Import data - process of validation

Ward says OSA handles millions of pieces of data and INTTRA’s Tender tool helps OSA define how the carriers have to submit their data. “The more we can get the carriers to put all pieces of data in the right place means when we it (quotes) out of the sausage machine they’re it easier to analyze,” he said.

• Ability to customize formats through User Defined Fields (udf's)

This tool helps customize data input fields that assist customers like OSA gather information they need for the tender process from the carriers. The fields force the issue of what questions the carriers have to answer, allowing OSA to get back information that might not be included in a normal tender, something Ward says they need to explore more fully the next year. According to Chisamore, "This will give us even more options for constructing the tender and analyzing carrier service offerings." 

• Ability to select (filter) lanes to export or view

The autofilter allows OSA and others who carry out tenders to review trade lanes for multiple carriers, locations, commodities, equipment types and regions, filtering out the information they want.

• Ability to control what surcharges can be quoted by carriers

The tender process is very much a dance between carriers that want to maximize their rates and customers who want the best service. Ward says it’s necessary to understand the “number of different ways carriers maximize their rates, including sometimes hiding surcharges and tariffs. You’ll find they’ll quote the same trade 10 different ways with 10 different surcharges. We need to pick apart their cost structure and catch extra costs that the carrier considers beyond their control.”

INTTRA’s Tender helps OSA encourage carriers to define their surcharges so OSA officials “can make a valid comparison between one line and the next. This is a vastly important tool as it allows us to narrow the carriers down to charges where they are obligated,” Ward said.

• Currency management provides instant quotes/rates in preferred currency.

Currency plays a role in price when they want a comparison quote, or when they want to determine if a carrier has added surcharges or tariffs, depending on the destination country, says Ward. He and Felton have found the currency tool useful “for weeding out errors,” particularly currency errors.

Ward says OSA generally tries to stick to whatever currency is quoted. “If we’re quoted in dollars we stick to dollars,” he said.

Adds Chisamore, the INTTRA Tender tool shows various base rates and the total rate. Additional or "not-included" surcharges are shown separately, converted and rolled into the total rate. The currency feature “can provide a quick acid test to see why a carrier’s quote is so much higher if the base rates are the same, which could indicate a currency error. Shippers do prefer to see the cause of total rate variations and if the variations are beyond the carrier's control,” he said.

• Carrier status report allows instant tracking of carrier status/completeness of their quotes

This is a new feature that allows customers like OSA to instantly see the current status of any carrier responses. Have the carriers opened the tender? Have they quoted some lanes or have they submitted any quotes back to OSA?

Felton has found this a useful feature to assist him to determine "which carriers have uploaded their information into the system. This step saves us from downloading a whole report," he said.

• Counter offers and reopening the tender

When a customer counters a tender, it creates a second round that may include new instructions or a target rate for the carrier that will result in a new rate. Reopening the tender merely allows the carrier to update an existing response, Chisamore says.

Although OSA doesn’t formally counter tenders through INTTRA, Ward says they use this tool when they want to reopen the tender without starting a second round. "Then we are able to return trades to carriers for further review and make them immediately available for carrier review,” he said. 

“Once the carrier quotes the initial rate they want to supply in the tender, if they come down then the new agreed-upon rates go in the tender. This tool provides a confirmation of the final agreement. It keeps us up to date, provides a history of the negotiation and the last quote, which is all we care about,” Felton said.

• Analysis tool

INTTRA Tender provides the ability to see carrier responses grouped by trade lane and ranked by shipper preferences. Ward says OSA uses this tool “based on price rather than transit time, service, etc . . . We try to get the carriers within a percentage of each other, so it’s useful to see which carriers are higher and which are where we think they should be.”

Felton adds that this tool saves time because it means they can come back to their members with the best possible quote, rather than giving all members two or three quotes from carriers “that are way out of whack. That’s a waste of time. We try to get carriers within a relatively small margin so they can apply their all service criteria, whether it's transit time, direct shipment, trans-shipment or who has equipment available.”

• Exporting data

OSA officials note that some of the carriers do export data that’s collected from INTTRA tender to incorporate in their agreements.

INTTRA Tender Services

INTTRA tender is a Web-based application that saves on equipment and software purchases. INTTRA provides the following with its Tender package: 

• Free Access and Use

Both Ward and Felton cited the fact that INTTRA Tender is provided to them free as a major incentive to use the tool. INTTRA member carriers, which back INTTRA, are promoting the tool because it generates such huge savings for their internal operations and customers, they note.
• Implementation services and training

INTTRA provides one-time implementation and training and helps design the tools for customers as it’s too complex to train via the Internet, Chisamore says. Ward says this is a tremendous advantage because INTTRA has helped OSA structure its tender process. “Each year we change it around and are hoping one day to standardize and use the same format each year, but it’s an evolving process,” he said.

• Support 24/5 global carrier support

As of January 2006, INTTRA began to provide support for INTTRA tender 24/5 or 24 hours a day for five days a week on a global basis.

• Preferred carrier solution

OSA officials and Chisamore all note that INTTRA carriers have endorsed the Tender tool as the preferred solution for their customers. Chisamore said, “The message has been getting around and in the next year or so you’ll see more and more carriers actively introducing our Tender tool to their customers.”

OSA officials report that this is the case already from long-standing INTTRA carriers. They reported positive feedback on the tool with carriers in meetings during the fall of 2005.
 
• The only tool built for shippers and carriers

Chisamore is receiving positive feedback from both carriers and shippers that INTTRA’s tender provides features that are valuable to both entities. “There are features that are valuable for carriers and existing shippers validate the INTTRA Tender as a solution for all participants in the tender process,” he said.

• Back to Case Studies