LogisticsExchange has begun buying, selling and trading so-called “LE Forwards” contracts on its digital platform. The contract is an enforceable mechanism that guarantees capacity to shippers and committed loads to carriers. It’s similar in principle to a platform launched in 2017 for the ocean shipping industry, called the New York Shipping Exchange (NYSHEX).
The founders of the exchange said Monday they analyzed datasets from shippers and logistics service providers (LSPs) to identify opportunities to secure capacity at fixed rates using LE Forwards.
They said the benefits to shippers are guaranteed capacity, service and cost; carriers can improve network balance, and pricing and asset allocation decisions; and brokers can manage risk and secure capacity.
“Our close collaboration with industry leaders has been critical for developing analytical tools, standardized contracts, and transparent trading rules that solve persistent problems for shippers, carriers and 2PLs,” said Anshu Prasad, co-founder and chief executive officer of LogisticsExchange. “Delivering value for today’s logistics market participants is critical for establishing the foundation of trust and transparency we will need as we expand buying, selling and trading activity to a broader set of industry participants.”
The exchange said users of the contracts have secured future capacity for “several thousand shipments…at rates 10 to 25 percent lower than through alternate approaches. Although these initial contracts represent a small portion of the nearly $400 billion spent in the U.S. annually on for-hire trucking services, these contracts suggest the enormous benefits available for shippers, carriers and 3PLs through a common platform, transparent trading rules, and advanced analytics.”