The global export value of just Sawn Timber Softwoods (one of many different types of timber and forest products) is reported to be around $22 billion out of a total forest product export value of around $270 billion..
This value and volume in the industry inspired the creation of the Centersource Digital Platform in Sweden with a view to eliminate manual processes from the industry and digitalise the entire gamut of manual processes..
As part of the Product Reviews I do on this site, here is my review of this Platform..
Containerised shipments allow timber to be moved from remote and inland locations using a combination of transport modes such as rail, road, and barge to coastal areas to be shipped around the world..
For some customers, the shipping of timber could be as problematic as it is valuable..
As timber is usually shipped in large volumes, there has to be an extremely close coordination between the various parties from the live-loading of the cargo into the container, the carriers, the entities fumigating the containers, and the documentation team that prepares all the pre-shipment and shipment documentation..
Like many other businesses, along with freight rates, the transit time of the cargo from forest to end-user is important. Especially to sawmills and the factories that prepare the cargo to the required specifications..
Speed to market is sometimes crucial in this business, as is slow steaming or longer transit, to avoid tariff increases in some cases or to adjust the delivery schedules to suit the customer’s requirement..
Well, these are just “some” of the things that timber customers must look out for in the course of global trade with other regulatory issues, also to be considered..
Due to the nature of the commodity, timber is usually moved in large quantities across various trade lanes and there are several processes to be followed for the shipment..
Right from order placements, creating the required documentation and its transfer, booking the cargo with the lines, monitoring cargo movement and ensuring that the supply timelines are met, there are many intricate processes involved..
Many of these processes are still done manually, which results in inefficiencies in the business..
As per industry research, people spend a lot of their daily time on below points
- 40% trying to calculate CIF prices for the product
- 25% sending offers
- 65% drafting documents
- 40% sharing information and trying to stay up to date
- 20% tracking and tracing their shipments
- 80% of those interviewed said they use Excel or Shared Folders to organise their shipment deals and files
- 100% said they communicate using phones and email
- 100% rely on free-tools (not always the most reliable) to track shipments
- 64% of the respondents said sharing or collecting market updates is their largest problem
What if there is a platform that says you can do all of the above seamlessly and more efficiently..
As per Centersource, their Timber Exchange platform can do all of the above and even save you money while doing it..
So naturally, I did a review of this platform which classifies itself as a “supply-chain automation platform built by industry professionals with significant global experience, covering trade and related logistics activities from inquiry until goods arrive at the buyers’ place”..
While the platform caters to many different commodities, as per the CEO “Our mission is to digitize the global timber supply-chain, enhance cross-border collaboration and automate the most time-consuming process facing companies today.”
The first thing that grabbed my attention was the practical nature of the platform..
It basically follows the process flow of the global timber supply chain from the negotiation of the deal to shipment..
It has a simple navigation menu on the left with various levels starting with a Dashboard and everything required to handle, track, and monitor a shipment..
The platform has 80 functionalities or tools segregated under various categories (as below) which provides the user with plenty of options to handle all their business from one place..
The platform offers customers two main ways of transacting business
1) Sellers can create their own “deal” depending on the volume of the cargo, the value of the cargo, destination, and other crucial information and allow authorised buyers to view and accept/reject the said deals.. These one to one deals are carried out with maximum security..
The buyers can either accept or reject the offer in which case either party can renegotiate..
2) Sellers can create “open bids” through the tender option which allows them to showcase their products along with the volume of cargo available, the value of the cargo, destination, and other crucial information to interested bidders in the same secure settings..
The negotiation tab allows you to not only add your offer to the customer but to review the previous offers, which were made to the client, and the status of the same.. This is most useful for sellers to track the performance of a specific customer in terms of their negotiations and offers..
Not just sellers and buyers, freight forwarders can also enter into the system and link themselves to the accepted deal.. For added security, a forwarder can only link themselves to the deal if their rates have been used by the seller..
This linking is done by the freight offer that is made by the forwarder for the shipment of the goods from the seller to the buyer..
As some forestry products have a relatively low product value, freight and transportation costs can affect the total shipment price.. Therefore, it is important that the shipper ensures that the freight forwarder has included and quoted ALL relevant charges..
While this platform comes with a price calculator, it seems to be restricted to ocean freight, port costs, and transportation costs..
It is missing a vital cost item and that is the local landside charges of the shipping line at both ends..
Local landside charges include the shipping lines charges such as service fee, release fee, bill of lading fee, certificate fee, chassis fee, and few other costs that shipping lines levy on their customers..
In some cases, all these costs put together can be even more than the ocean freight cost and it is important to take this into account as these costs will make a big difference to the seller or buyer based on the Incoterms® rules used..
While the local charges seem to be available when the EXW Incoterms option is chosen, it would be a good option for Centersource to consider introducing this cost factor into their platform as a standard..
Speaking of costs, the platform has based its deals on the market as the commodity pricing is based on market-based prices..
The pricing module allows the user to search for the market prices based on a variety of factors and combinations such as the category of the forestry product, grade, species, destination, and many more..
The Centersource platform offers an integrated approach to the customer’s digital needs..
It provides all the functionalities of a commodity exchange platform with its own CRM. It also comes with the option to create and develop your own network of customers and freight forwarders..
The Network option comes with its own mini Dashboard, which provides a comprehensive overview of the various network partners in the pipeline and the status of their connections..
The platform also offers a Payment module, which is a friendly and useful tool.. This is probably one of the other big strengths of the solution as this then ensures that the customers don’t have to leave the platform, not even to make payments..
Speaking of leaving the platform, the site even has the option of providing customers with a market summary both for the Exporting and Importing markets..
It also has a news section that provides market news relating to the timber and forestry industry..
I only presume that these options are regularly updated as I didn’t get the opportunity to “test” the freshness of the information, but I am told that on the live platform, it is updated every few days with information from more than 100 different sources based on inputs from all top market reports globally (those are also included)..
The creators of Centersource platform are offering two solutions to customers
- Managed Platforms – which are industry-specific platforms such as timber and forestry products, poultry, pulp, pellets, metal, fish, coffee, marble and minerals industry, which they develop and manage independently or in collaboration with industry experts
- White-Label Solutions – which are branded and customized for your organisation, irrespective of the industry and organisation
Although I have not been able to verify this independently, the system is said to be able to save the user, close to $2700/- per shipment on a 15 container or 705m3 deal..
These financial savings are said to come in the form of cash flow improvement, reduction in documentary fees, automation of non-value adding tasks, and increased productivity, all of which translate as savings for the customer..
The platform has no annual license or upfront fees and it is free for importers. The pricing model depends on whether it is a managed public platform or a customised white-label solution.. And, it comes with top notch security protocols both at server and client level..
As strong as the platform is in its ability to allow the user to create, negotiate, monitor and execute the trade, I was quite impressed with another big strength that the platform has – and that is the analytical information available through the platform’s dashboard(s)..
The main dashboard provides a wide variety of analytics like the supply chain calendar, which provides info on when the goods are ready in the mill, when they need to be delivered to the port, the arrival and sailing dates of the vessel, payment dates, and dates of shipment and document presentation..
Along with the supply chain calendar, there is also a nice view of your own supply chain activity outlining how many active deals you currently have, the actual volumes and value of the deals, how many are in the negotiation stage, and how many are in the demand and supply platforms..
Tracking and tracing of shipments also seem to be easy on the platform. The dashboard provides real-time information on the volumes loaded (number of containers and bulk tonnage), shipments that are in transit and those that have arrived at destinations..
In addition to providing information on the status of the containers per stage, the platform also provides data on the delays per destination and the number of days it is delayed by..
Additionally, the dashboard also nicely integrates Google Maps with live AIS data information of the various shipments on water and the exact location of the ships..
The view is available to all customers who have shipments on water and are registered with the platform..
There are several pain points that customers have to go through in global trade and logistics, especially in commodity trades..
As per the creators of the Centersource platform, based on their forty years of experience in the industry, they have identified the most common issues buyers and sellers face..
- Lack of automation, which creates a repetition of non-value-adding tasks
- Lack of collaboration, which inhibits sharing of information, staying up to date, and the ability to analyse business and the market
- Manual processes involved in Trading & Tendering – both for goods and freight
- Lack of supply chain visibility, tracking and tracing
- Ensuring correct documentation to avoid penalties, losses and delays
- Traceability and accountability in terms of document flow, approvals
- Critical processes not being completed in time, which compromises compliance
- Uncertainty surrounding financial partners, customers credit history
The Centersource platform (www.centersource.io) has very succinctly provided an elaborate solution to the above-mentioned pain points for the industry..
Whether you are a seller, buyer or forwarder, if you are flummoxed by the sheer number of tools available on the site for you, don’t worry, there is a tool for that as well.. 🙂
The platform comes with a Help module, which takes you to an easy-to-use Help Desk..