Dry bulk vessels charterer BHP Billiton launched its online system for securing freight tonnage capacity with its first online auction last week.
The web-based application allows vessel owners and operators to compete to transport BHP Billiton commodities via a secure and confidential portal, illustrating the growing emphasis of technology in changing traditional industries.
With this system, the company is looking to cut costs by avoiding brokers who usually negotiate vessel-hire rates between cargo owners and shippers, according to Reuters.
“We are very excited to bring web-based auctioning of our tonnage capacity demand to the market. This is another tool we intend to use to help drive efficiency in the industry for both vessel owner/operators and for BHP Billiton Freight. This is a great example of how technology can be used to stream-line process and improve transparency,” Rashpal Bhatti, VP Freight at BHP Billiton, said.
Held on January 25, 2017, the first e-auction saw 13 participants place their bids to transport 170,000 tonnes of iron ore from west Australia to China next month.
More than 50 bids were placed in the space of an hour and the final number achieved was almost USD 0.30 below the C5 spot price, BHP Billiton said.
Also, within minutes of the auction closing five other vessel owners who were not invited to bid have asked to be part of the next e-auction.
BHP Billiton informed that the next e-auction will be in a week’s time.