The rise of e-commerce has prompted a need for centralized information in the supply chain of many companies. Traditionally, the information can be spread across freight forwarders, factories and retailers, posing major obstacles to businesses.
This is why Shippabo, a cloud-based supply chain management platform, was created. Shippabo said it helps businesses organize and leverage their information so it’s not a linear importing process for companies.
“To manage risk, organizations need to visually see where their manufacturers are and where the raw material is moving and how it impacts their own business,” Nina Luu, co-founder and CEO of Shippabo, told World Maritime News.
“Traditionally no one has had it together in a way that allows the organization to benefit from collaboration,” Luu explained.
Shippabo claims its technology brings greater transparency, easy collaboration, actionable data and better pricing to the world of shipping and logistics.
Headquartered in Downtown Los Angeles with offices in the City of Industry, CA, the company currently has over 120 companies as clients that achieve an average cost savings of USD 200,000 per year, per client, or 11% of their total freight spend.
Shippabo was launched as a team of eight two years ago and today it has thirty employees.
The idea behind Shippabo
“Several years ago, I started a company importing home textile products and selling them to large retailers. My business grew quickly because of the growth of e-commerce. At the time, most retailers were set up to move large pallets and containers to different facilities. They didn’t have the infrastructure to do a pick-and-pack of their products, and the 3PL industry wasn’t as robust as it is today, so they couldn’t turn to it,” Luu said.
“This was before the entire concept of online marketplaces took hold. Instead, it was pure order fulfillment and somehow being able to provide products to end consumers.”
“We identified that as opportunity and decided to create products and handle fulfillment for retailers. We also offered a private label fulfillment service that would allow retailers to really scale their ecommerce operations. They signed on very quickly,” Luu added.
However, the company started running into challenges with the many manual logistics tasks, like accessing freight release and customs release documents. The company also tried to centralize information scattered between emails and different systems in a way that would allow it to visually see and analyze the data. But because the information was isolated, the company wasn’t able to create a living document that the team could use to collaborate.
“That was the reason why we started Shippabo—the need for centralized information. It becomes even greater with larger sized businesses,” Luu pointed out.
How does the platform work?
A first step for many logistics departments is being able to compare their contract carrier rates to market rates within a single rate management platform. Then the planners, buyers, and even the sales team can track each product’s progress, even at the SKU level.
They can search by an item number and see if the product is, for instance, still in production or on a vessel, when it’s arriving, and how many units. They can see all the way down to when it’s actually in the warehouse or has been shipped to their clients. They will be able to manage all that in one single system, according to Luu.
As explained by Luu, one challenge with information that’s in silos is if you have a custom broker who is clearing your customs, that customs broker has your duty information and it lives in one system. And the freight forwarders may give you a quote, but as your container progresses, accessorial charges often are added on that were not part of the initial quote. And that information lives in the freight forwarder’s system.
“It’s hard to access and see all the information together. And that makes it even more difficult to tell if you’re making more money or less money,” Luu continued.
Shippabo’s platform aims to provide businesses with centralized collaboration, enabling everyone in a company’s supply chain to have access to the same information at the same time.
Utilizing Shippabo’s REST API, companies can integrate Shippabo into their cloud or onsite ERP, order management, warehousing or accounting systems.
Difference between Shippabo platform and blockchain
Conceptual applications of blockchain technology to the supply chain and logistics space are theoretically very exciting, according to Luu. However, the idea of trusting your cargo to partners managed by a blind algorithm is still a scary and abstract concept for many companies, she explained.
“Both large and emerging companies are fighting over what a blockchain industry protocol could be — IBM, SAP and Shipchain are all offering exciting visions of the future, but we’re still very much in the days of BetaMax vs VHS,” Luu said.
“If there’s a winner that proposes a great solution for clients — we’ll certainly work to accommodate. But right now these technologies are more bleeding-edge than proven solutions,” she believes.
Challenges and opportunities
When asked about experiences and challenges since launching, Luu replied:
“Hiring has always been difficult in the tech space and especially so when the subject matter is logistics. We’re tasked with bringing together not only the best and the brightest in both the engineering and supply chain management spheres but also the ones that are unconstrained by traditional methods.”
“In order to build the supply chain management system for today and beyond, we will continue to hone an environment that allows everyone to bring their best ideas to the table, do some of their best work and grow.”
Reflecting on the advice of Kendall Trainor, Walmart Sr. Director of Operations Support and Supplier Collaboration that “variability is the No. 1 killer of the supply chain”, Luu said that peace of mind is often a foreign concept in shipping. She added that there are too many ‘ifs, ands, and buts’ to account for across the supply chain to ensure smoothly achieving on time and in-full deliveries.
As a result, shippers become less trusting and put layers and buffers into their processes.
“An ideal shipping process should free you to book a shipment as soon as you place a purchase order. You can anticipate when the shipment arrives at your warehouse. And you can start selling when you book a shipment, rather than buffering for all the variables,” according to Luu.
Every supply chain should help businesses achieve efficiency in their inventory turn and pre-planning capabilities. In achieving those two objectives, businesses can more accurately plan for the future and prosper, she continued.
As informed, lack of container-level visibility is a common pain point across supply chains. Shippers want to know exactly where their containers are at each step of the way, so they can plan accordingly and keep operations moving efficiently.
However, there are still some blind spots in the shipment lifecycle as containers move between partners in the supply chain.
“You might be told it’s one place or at one step of the process, but then you come to find out that may not be the case. Therefore, eliminating these blinds spots and providing full visibility around tracking both transactions and physical units is a significant competitive advantage – and this is what we’re working towards,” Luu concluded.