Mizzen Group, an Australian digital shipping solution provider, is looking to reshape the liner spot market pricing practice with its latest online product, Plimsoll.
In September, Mizzen, in partnership with Maxamation, announced the launch of their joint product, Plimsoll, a yield management and dynamic pricing solution built for container shipping lines.
Jon Charles, managing director of Mizzen, reckons there is a disconnect between price, supply, and demand in the market as the provided rate quote has a date validity rather than one for a specific vessel voyage and it can be used to make a booking on any voyage sailing between the validity date, regardless of the voyage’s utilisation factor.
Back in 2017, Mizzen launched Mizzenit.com, a global marketplace for freight forwarders to book containerised spot market space.
“We built software that enables a shipping line to take a more targeted and automated approach. Creating the ability to set a price for a specific vessel voyage and limit the amount of allocation the rate is available for, and deliver it instantly to their customer,” Charles explains.
According to Charles, the company started exploring ways to learn from other industry sectors’ use of dynamic pricing and began to collaborate with Maxamation, who have provided revenue management software to the airline sector for 20 years.
Plimsoll was developed by Mizzen in response to a dynamic pricing challenge issued by container carriers Ocean Network Express and Hapag-Lloyd this year as part of the third Ocean of Opportunities (O3) global shipping and logistics innovation challenge. It incorporates components used by over 40 airlines in 27 countries with liner pricing software used by eight shipping lines and their customers.
“Generally yield management in container shipping lines is done using internal built systems. With very few lines having a digital channel and ability to offer a customer a dynamic price, it is difficult to efficiently give effect to your short term pricing strategy,” Charles says.
Charles believes in the short run the only channel to improve a vessel’s yield and the profitability of a tradelane is the dynamic spot market because there is no pre-committed price or space allocation to customers and it allows for rapid reaction to changes in market conditions.
“Our product enables trade managers to rapidly react to change, guided by data in a highly controlled manner and use price as a lever to steer the cargo they want to carry to the optimal vessel voyage at the best price possible to maximize the profitability of the vessel voyage as a whole,” Charles claims.
This year has seen the rapid roll out of shipping lines own digital products. Charles says he sees a clear digital divide between the digitally enabled shipping lines and the rest of the market but he reckons the gap will not remain for long.
“Our vision is to enable a carrier to service their customer where ever they are online, the carrier’s own website, their ERP and operating systems or third party platforms,” Charles says, adding that he can see potential to apply the product beyond container shipping into other modes of transport.
“This can be delivered by a centrally managed price distribution via APIs, and this will be how shipping lines will unlock the true transformational potential of a digital channel and dynamic pricing, capturing the billions of dollars wasted by suboptimal industry pricing practices. This will be the next stage in digitalisation and value creation and what we are working towards,” Charles concludes.