Transparent, data-driven voyage costs can help protect the bottom line, says Harbor Lab chief executive and founder Antonis Malaxianakis
Container lines have never had it so good. Shipping heavyweights are posting huge Q3 2021 profits spurred on by closures, congestion at ports and box shortages. Drewry reported it expects average Q4 container rates to have increased by 126% over the previous quarter. Industry observers predict these inflated container shipping prices will continue in 2022.
But what goes up must come down. Container prices are high right now but the rates currently demanded won’t be sustainable long term. The per-box net profits realised by container lines in a more normal business environment are slim and when rates return to ordinary levels, every aspect of a voyage will once again be under scrutiny to protect the bottom line. Lines may wish to rethink their outgoings, including securing the best rates for their port tariffs and, importantly, fuel costs, which represent the second-biggest cost in a voyage.
Addressing port cost transparency
Most container shipping companies entrust their disbursement functions to inhouse accounting teams or third-party companies, but either way transparent information surrounding port costs is difficult to obtain.
This is the problem Harbor Lab was created to address and something which I saw during my time working within the disbursement accounting teams of two big Greek shipping companies.
Harbor Lab’s digititalised approach to disbursements brings transparency to the process, offering insight into the actual port tariffs and price of fuel at a given port, keeping the control inhouse.
Our analysts obtain verified, real-time data directly from the ports and unravel the matrices that determine individual ports’ fees. From there, they create complex algorithms that drive our online Disbursement Accounting (DA) Tool.
Port tariffs are one of several variable expenses required for accurate voyage calculations.
Others include bunker costs, agent’s fees, canal transit fees, and towage and pilotage costs, the prices of which are included in the DA Tool.
With such accurate port data, Harbor Lab was able last year to secure in excess of US$1M savings for our clients, compared with our competitors’ savings in previous years.
Importantly, owners and charterers can use the tool to cross reference the actual fees with charges put on their account. This opens up opportunities to renegotiate terms with third parties and puts the shipowner back in control of its outgoings.
Disbursement accounting is traditionally an administrative-heavy function that leaves in its wake complex calculations and communications trails through paperwork, phone-calls and emails. The tool not only brings transparency to these processes but also reduces back office administration by 75%.
Further, our mobile- and desktop-compatible software gives users access to rates whenever needed and unlimited port cost calculations can be generated with an annual fixed fee for use of the tool.
Container lines may be benefiting from the ‘supply and demand’ squeeze right now, but the long-term outlook should not be ignored. Voyage costs represent a significant proportion of companies’ outgoings, so it is worth examining the bottom line to protect future net profits.
Riviera Maritime Media will provide free technical and operational webinars in 2022. Sign up to attend on our events page
© 2023 Riviera Maritime Media Ltd.