Set Budget Expectations
Introduction
It’s important to set your budget as you go into tender. If you’ve been out of the market for some time, Xeneta can help you align expectations and forecast possible budget increases or decreases.
Global Market Trends
You can use the Global Market Trends to see corridor price changes between the present day and up to a year in the past.
By setting the Display parameter to the Past 1 Year, you can quickly find how the corridors that are relevant to your organization have been impacted.
Benchmarks Graph
Using the Benchmarks graph, you can plot your current freight rates against the market rates. It is the simplest way to see how much the market differs from your contracted rates.
In the example below, you can see that the short-term market rates begin to sharply rise over the course of half a year.
By the middle of October 2020, the difference between market prices and currently valid contrated rates is staggering. An organization about to tender at the end of 2020 should be aware that their budget will need to be much larger to accomodate shipping freight under these market conditions.
Auto-Generated Reports
If you’ve been using Xeneta for some time, you will have accumulated a number of monthly spend reports. These reports contain your own spend and the corresponding market spend for your relevant trade lanes and corridors. In particular, they contain the following columns:
- My Covered Spend Performance Relative to Market Average Spend (in %)
- My Covered Spend Performance Relative to Market Low Spend (in %)
- My Covered Spend Performance Relative to Market High Spend (in %)
By knowing your spend relative to the market in the months leading up to tender, you’ll be able to set budget expectations.
For example, if your spend performance on your largest trade corridors is well below the market, you may need to prepare for a price correction and expect needing a bigger budget to ship your freight.