Annual contracts

Warning to shippers that transpacific contract rates may be overheating

Transpacific shippers preparing to begin annual contract negotiations with container shipping lines have been warned that the market for contract rates could be around 15% overpriced.
According to new analysis from SeaIntelligence Consulting, the normal correlation between the transpacific spot rate market, as measured by the Shanghai Containerised Freight Index (SCFI), and contract rate market, as measured by the China Containerised Freight Index (CCFI), has diverged in recent months.
In...

https://theloadstar.com/warning-to-shippers-that-transpacific-contract-rates-may-be-overheating/

Ocean freight rate volatility ‘unprecedented’ – look out for ripples, warning

The spread between rates on the spot market has reached an “unprecedented” level, with wide-ranging implications for container shippers this year.
Analysing rates from Asia to North Europe during a webinar this week, freight rate benchmarking firm Xeneta showed how the average spot price had jumped some 2,000% over the past five years to $8,300.
However, as in previous years the spread between the lowest and highest short-term rate was around $1,000, …

The post Ocean freight rate volatility...

https://theloadstar.com/ocean-freight-rate-volatility-unprecedented-look-out-for-ripples-warning/

Shippers and forwarders claim carriers breach contracts to demand higher rates

As Asia-Europe container spot rates continue to skyrocket, shippers and freight forwarders are accusing carriers of breaching short- and long-term contracts to “charge whatever they want”.
In a joint letter to the Competition Directorate of the European Commission (EC), the European Freight Forwarders Association (CLECAT) and European Shippers’ Council (ESC) have protested about the “damage” the carriers’ behaviour is “causing to trade growth at a time of economic recession”.
According to the …

T...

https://theloadstar.com/shippers-and-forwarders-claim-carriers-breach-contracts-to-demand-higher-rates/

An ‘uphill battle for shippers’ on the transpacific as carriers shy away from contracts

As Asia-US demand continues to surge, BCOs are struggling to ship contracted cargo and are increasingly turning to NVOCCs to support their fractured supply chains.
Anecdotal reports to The Loadstar suggest carriers are finding spurious reasons to refuse the release of equipment at depots in China, in addition to rolling contracted containers without notice.
“It’s a no-brainer really,” one Shanghai-based forwarder told The Loadstar. “Carriers can get four times the price for …

The post An ‘uphill...

https://theloadstar.com/an-uphill-battle-for-shippers-on-the-transpacific-as-carriers-shy-away-from-contracts/

Carriers bullish as shipping contract talks loom: ‘it won’t be a buyer’s market’

European shippers are finding it increasingly difficult to begin annual contract negotiations with container shipping lines.
November is the traditional start of the annual contract negotiating season on the Asia-Europe trade, with deals mostly signed by the end of the year.
However, after the astonishing gains on a spot market which grew another 9% this week, it appears the relationship between carriers and their customers could be fundamentally different in 2021.
Anecdotal reports …

The post Ca...

https://theloadstar.com/carriers-bullish-as-shipping-contract-talks-loom-it-wont-be-a-buyers-market/

Slack season? Not on shipping lanes, where high demand still holds sway

Despite the start of the traditional slack season – as China’s Golden Week holiday gets underway – there seems no easing of the demand spike from Asia to the US and Europe.
And reports to The Loadstar suggest some factories in China are continuing production during the holiday to catch up with the backlog of orders.
Capacity on sailings to the US and Europe remains “extremely tight” through to November, according a …

The post Slack season? Not on shipping lanes, where high demand still holds sway

https://theloadstar.com/slack-season-not-on-shipping-lanes-where-high-demand-still-holds-sway/

Shippers face ‘significant’ rate hikes as new container contract talks loom

Having succeeded in aggressively raising container spot rates during the pandemic, ocean carriers are now laying the foundations for a substantial uplift in annual contract rates.
Shippers and carriers traditionally start negotiations for the Asia-Europe trade in October and November, and for Asia to the US in February and March.
Maersk, for example, reckons around half of its business still comes from annual contracts with BCO and NVOCC shippers, but given the …

The post Shippers face...

https://theloadstar.com/shippers-face-significant-rate-hikes-as-new-container-contract-talks-loom/

Continued lack of airfreight capacity has created a ‘battlefield’ for forwarders

Shippers should expect to pay “bullish” carriers higher freight rates next contract season.
According to Ludwig Hausmann, partner at McKinsey & Company, upcoming freight contracts will be characterised by “very high” rates.
“Carriers in air, ocean and rail are being very bullish in the short term, but very insecure about the middle and end of next year,” he said during a webinar by Xeneta.
“Shippers that commit to certain volumes and block space …

The post Continued lack of airfreight capacity...

https://theloadstar.com/continued-lack-of-airfreight-capacity-has-created-a-battlefield-for-forwarders/

Shrinking contract rates pushing ocean carriers towards the spot market

Declining long-term contract rates on major tradelanes may be a concern for ocean carriers, but the bullish short-term market is proving the “silver lining” that could shift their focus towards the spot market.
Indeed, some carriers The Loadstar spoke to recently suggested the future of large-scale annual volume contracts may be limited to a ‘new normal’ of rolling three-month deals, renegotiated in the light of increasingly volatile market changes.
Oslo-based Xeneta’s XSI contract rate …

The...

https://theloadstar.com/shrinking-contract-rates-pushing-ocean-carriers-towards-the-spot-market/

Blanking voyages holds ocean rates steady, but masks the real impact of Covid

Container freight rates have yet to see any significant erosion, despite the coronavirus pandemic’s stranglehold on demand.
But the aggressive blanking programmes of carriers is disguising the real picture, according to Bimco’s chief shipping analyst, Peter Sand.
Indeed, for spot rates the SCFI cumulative index is still some 10% higher than 12 months ago, while its longer-term CCFI contract component is 9% higher.
The analyst said the blanking, combined with slower steaming and …

The post Blankin...

https://theloadstar.com/blanking-voyages-holds-ocean-rates-steady-but-masks-the-real-impact-of-covid/

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