Allocation management is

  • negotiating the best possible price to secure the space you need ( “allocation”) to ship your products on container vessels
  • then using up that “allocation” in the most cost effective way by assigning shipments to the carriers that can get your products where you need them with least cost.
  • and monitoring that both sides are meeting the terms agreed in the contracts

Volume planning

The process starts with knowing how much you want to ship.  This is “volume planning”.

Because things change during the year, volume plans are rarely accurate.  But combining data sources can help and Cargoo enables clients to:

  • plan using historically accurate shipment data from carriers
  • factor in company estimates on shipping lanes, volumes and seasonality

Securing allocation

This forecast drives negotiations with carriers where purchasing managers try to negotiate the best possible prices to ship their product where it’s needed.

This is called “securing allocation” because you now have space in a boat allocated to you each month / week.

In the meantime factories produce and deliver product where needed

Consuming allocation

At this point it is time to start using allocated space by allotting shipments to the carriers that can deliver your products where needed most cheaply. 

This is known as “consuming allocation”

BCOs may find opportunities to reduce fees because

  • Cargoo provides real-time carrier and contract information so the best allocation decision can be made
  • BCOs can delegate that decision to any forwarder, supplier, wholesaler or other partner

The benefit of an end-to-end platform is that all this data if fed into the reporting modules which updates allocation consumption by carrier and audits the costs to compare them against contract terms.This helps you be a good customer and avoid penalty fees from carriers

And validate if carriers are being good partners.