Maersk, one of the world-famous freight shipping companies, introduced a new contract product that avoids the reliance on the accurate forecasting of weekly and monthly allocation in the international freight shipping market, challenging the long-held belief that accurate forecasting from shippers leads to better capacity utilization for the international freight shipping market.Uptaking the new product helps Maersk reach 10 percent of the total international freight shipping contract volume and also gives shippers a way to secure the capacity within a higher price than the amount paid under the traditional minimum quantity commitment-based (MQC) contract.In an MQC, cargo owners and carriers agree to ship a specified volume of freight with a fixed shipping freight rate within a period of time; however, the contract is often not met by one party or the other, depending on the underlying situation of the international freight shipping market.“We’re using machine learning to figure out how the international freight shipping market is developing,” said Johan Sigsgaard, global head of ocean products at Maersk. “Our data science team knows how to build our forecast based on the signals, looking at historical data, the timing of bookings, and aggregate booking behaviour.”In essence, Maersk is confident that the new data-driven product will enable freight shipping companies to forecast capacity availability based on its analysis of customers’ behaviours in lieu of continuous tracking changing demand forecasts. Sigsgaard stated that Maersk initially allotted 10 percent of its contractual volume to the new product due to the extreme shipping freight rate and the other COVID-19-induced disruption and would look to expand the allocation when the international freight shipping market calms down.

SOURCE: JOC