INTTRA reports contracts worth $100 million
INTTRA, the e-commerce portal, said Wednesday it has entered into new contracts with five of its steamship company owners worth $100 million over the next three years.
The company also announced it is changing how it prices its services. INTTRA said it hopes to expand its share of the market for the services it offers from about 10 percent to 25 percent over the next five years, while it rolls out new products in coming months.
INTTRA said it has entered into long-term agreements with Maersk Line, Mediterranean Shipping Co., CMA CGM, Hapag-Lloyd and Hamburg S'd. The five lines are principal owners of INTTRA, along with United Arab Shipping and the logistics company Kuehne + Nagel. While the owners provide a large proportion of INTTRA’s revenue, INTTRA also has connections to about two-dozen lines.
'This is a very challenging market for our carriers, and so INTTRA is particularly pleased that many of our carriers have entered into long-term contracts with us. We are committed to creating more efficiency for this market through new and existing products and services,' said Ken Bloom, chief executive officer of INTTRA.
Bloom said that instead of pricing its services so that it bundles both transactions and professional services into a single price, customers will be able to purchase just transactions or professional services. There will also be flexibility in transaction pricing, he adds. Customers can pay a fixed cost — “pay by the drink,” so to speak — or get a discount if they agree to certain volume commitments.
“If you are a carrier and you want to increase your e-commerce, you can connect to INTTRA, have the benefit of certain transaction pricing, and then purchase professional services in a market specific, time-specific way to help you as a carrier increase your e- commerce ratios just where you wish to do it,” he said. “At this time point in the evolution of e-commerce it is reasonable for carriers to think of a commitment, and they may not have felt that way years ago.”
Bloom said the changes INTTRA has made have not been in response to recent downturn in the market, but have been under development for two years.
During the downturn, INTTRA has actually seen its own volumes increase about 25 percent, both in the number of shippers that use INTTRA and those who have decided to start using INTTRA for more than one product.
INTTRA has logged a 7 percent increase in year-on-year volume, and Bloom said that trend has improved to about 12 percent since December.
“E-commerce is a good thing, it helps pull costs out of the system, and what we are seeing in a tough market is more people using what we offer,” he said. INTTRA estimates that the services it offers could potentially pull $5 billion in annual costs out of the shipping industry if they were used universally. Today, the company only has a 10 percent share of those services, but Bloom said the company hopes to grow that to 25 percent.
“We charge something for that, of course, but it is a fraction of what carriers save. Effectively we feel we have pulled out 10 percent of that $5 billion already,” he said.
Bloom said that he thinks that outsourcing of information services to portals will continue to grow.
“In the early days there were many carriers who said, 'I don’t want an INTTRA to get in the way of my customer relationships,' and 'I don’t want INTTRA to dilute my brand,' ” he said. “That has not happened. When carriers try to do this themselves, they end up introducing new service level requirements” that are a separate and demanding business from moving freight.
'By working with INTTRA, we have reduced our costs and achieved scalability that provides real dividends for our business and for our customers,' said Andre Simha, chief information officer of Mediterranean Shipping Co. 'The ability to save significant time and increase productivity for our shipping processes — now more than ever will strengthen our position in this current economic environment.'
'While volumes of electronic transactions keep growing significantly, INTTRA's long term contracts are helping CMA-CGM to lower their costs for key business processes,' said Marc Boyer- Chammard, vice president of information systems for CMA-CGM SA. 'Furthermore INTTRA transactions improve data quality and increase the level of customer satisfaction.'
Through INTTRA shippers can find ships through online schedules, book cargo, get shipping instructions, create, review and approve bills of lading, receive bill of lading data, track shipments and manage exceptions and do online reporting of those functions. Going forward the company hopes to roll out additional products. Eventually the company may expand into areas such as less than containerload shipments or freight invoicing and payment.
Bloom said INTTRA sees its role as an industry portal is to create open standards, and create portals by which companies can connect to carriers through a variety of ways such as EDI, XML, the Web or desktop software, or through software alliance partners. ' Chris Dupin