Or is it? - some are more valuable than others and in turn, some are less desirable.
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There are many aspects to consider when evaluating bookings aiming at optimizing utilization of the vessels’ capacity - also with respect to profitability.
Space allocation is meant to manage the distribution and usage of resources for which capacity is limited, in particular slots (as well as weight and reefer plug restrictions) on vessels.
By providing centralized and visible information about the allocation and usage of available capacity on each vessel/port combination by line, service or agencies, space allocation management will help optimize vessel utilization and reduce over-bookings that lead to service failure. The ideal of any line is to maximize the utilization of available capacity (fixed asset cost), without overbooking, where service failure represents poor customer service and unrecoverable additional costs that were not taken into consideration at the time of acceptance – and may thus become loss-giving.
An integrated solution linking space allocations with bookings each providing the entire transport route (retrieved and calculated based on the dynamic routing generator), will enable a holistic view for management of space allocation across all services and vessels.
This type of solution can also provide real-time information about free capacity that may provide short-term revenue opportunities as well as historic data about utilization that will allow optimization of future allocations by profit/cost centre. Improved visibility and understanding of capacity constraints are also important prerequisites for optimal pricing. Space allocation must also ensure space guarantee for empty containers! It is very important to monitor and compare bookings versus allocation for each agent/port/sales-area aiming at producing the highest yield and asset utilization – and the integration needs to be two-way:
Booking to space allocation: the purpose of this integration is to automatically check for available space, reserve it, and provide a booking confirmation with the customer still on the phone or in response to an E-booking (received via the internet or EDI). Therefore, it must be possible to access space management from the booking solution. Space consumption by bookings must be updated real-time. In case the required space is not available the booking can be wait listed and enter a separate work flow for further evaluation.
Space allocation to booking: to get a complete overview of bookings with space reserved (and waitlisted), incl. route, revenue and contribution in order to optimize vessel's utilization by transfer of (released) space from under performers to areas requiring additional space (or yielding more profitable bookings).
The space management functionality needs to keep track of actual consumption as indicated by bookings and compare with the corresponding allocation. The "trick" is to be able to identify the "right" allocation based on booking data.
The above is principally about space allocation and bookings against a particular vessel/departure, whereas a more advanced methodology would be to apply dynamic allocation integrated with automated assignment of best routing based on all vessel departures within a specific time period – as outlined in the below illustration:
Apart from having worked directly with software pertaining to this area, I have also made business requirements definition for a forecasting and space allocation solution, made studies and recommendation on how to improve and integrate vessels’ space allocation for a number of major lines - as well as made a conceptualization of dynamic allocation methodology integrated with automated assignment of best routing/vessel. Please contact me for a talk about how I can help you.