One of the key challenges in container shipping, is the lack of shipper/carrier contract enforceability. With freight rates increasing sharply, there are calls for carriers to stick to contracts. Such calls would implicitly assume that shippers would reciprocate, when the market eventually goes down. But is that also what happens? To follow the Sunday Spotlight, please contact [email protected] for further information. #seaintelligence #containershipping #loyalty #contract
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📈 📉 A recent piece from The Loadstar provides great summary of the growing separation between spot and contract rates going into peak season. To summarize, spot freight rates are surging, echoing pandemic trends and widening the gap with contract rates. This benefits large shippers over SMEs and freight forwarders, according to Xeneta. Market analyst Emily Stausbøll highlighted similarities with past crises but noted quicker mitigation in the current Red Sea situation. SMEs often pay more due to weaker negotiation power, while larger shippers benefit from long-term contracts. Freight forwarders face pressure from both shippers and container lines. The primary concern is the divergence between spot and contract rates, causing cargo rollovers and higher costs. Rates are expected to rise further into July. We've noticed this trend among our customers at Freight Right. The 2024 season has been marked by an aggressive tug-of-war between forwarders, carriers, and Beneficial Cargo Owners (BCOs). Despite initial appearances of stability with agreed rates around $1550 per container (Asia base ports to US West Coast), the aftermath reveals a landscape fraught with broken commitments, skyrocketing rates, and a palpable tension between key players. We wrote about this tension here and proposed some solutions here, https://lnkd.in/ei4wsj2w . To address this further we introduced a new service called Strategic Contracting, https://lnkd.in/ed6h9xU4 . The goal of this service is to help shippers identify opportunities with their freight partners to find more favorable, contract-grade rates at a time when favorable rates are becoming more scarce and for carriers and partners to identify opportunities for more equitable contract opportnities with partners. The underlying belief is that freight doesn't need to be a zero sum game. There's room for everyone to thrive given the right incentives and openness to hearing them. https://lnkd.in/eGFfsSbx
Forwarders 'being squeezed' as spot and contract rates move further apart - The Loadstar
https://theloadstar.com
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Record containership deliveries dash rate recovery hopes Article-Record containership deliveries dash rate recovery hopes Containerships commissioned in June hit a record, with more than one ship delivered every day adding 300,000 teu of capacity According to analysis by ocean and air freight data specialist, Xeneta, no fewer than 40 ships joined the fleet over the month. In its most recent market report, the Oslo-based firm said that a total of 990,000 teu of capacity was delivered over the first half, with a similar volume expected between now and the end of the year. The firm, which uses real-time, crowd-sourced data from leading shippers on the main trade lanes to compile its figures, reported that long-term freight rates have crashed, sinking to a two-year low in July. Its XSI® Shipping Index fell a further 9.5% from the June figure. Long-term valid contract rates have now sunk by 57.8% since the same period in 2022. Analyst Emily Stausbøll said that market indications show little sign of respite for carriers. Even though ‘peak season’ is just around the corner, overcapacity is ‘inevitable’ even if cargo volumes do increase, she said. “On all but three of the XSI sub-indices, the average of all valid long-term rates have dropped by more than 50% compared to a year ago,” Stausbøll revealed. “The average shipper on the main trades should be paying less than half the rates they were a year ago on the long-term market. Despite an increase in volumes from previous months, global container demand remains down year-on-year.”
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Container Trades Back in Pandemic-Level Territory with Rates Still Rising As a freight forwarder, I've been closely monitoring the significant fluctuations in container shipping rates. This latest update from The Loadstar highlights how the industry is navigating through unprecedented times, with rates climbing back to pandemic levels. In a world where supply chains are constantly evolving, staying informed is key to delivering exceptional service to our clients. Let's connect and discuss how we can tackle these challenges together! #FreightForwarding #Logistics #SupplyChain #Shipping #IndustryUpdate #ContainerShipping
Container trades back in 'pandemic-level territory' – with rates still rising - The Loadstar
https://theloadstar.com
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Shipping costs go up and up.
Team Global Logistics Co.,Ltd.|In the new year of 2024, fuel surcharges (BAF) are skyrocketing.
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Rising container rollovers and increasing spot rates are impacting global shipping logistics. Learn more about the current trends and their implications. #Shipping #Logistics #SupplyChain #GlobizzSynergy
Asia-N Europe is lines' lowest earner, as shippers report rollovers - The Loadstar
https://theloadstar.com
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There are many signs that point to a potential for 2024 to see a rebound in freight volumes and carrier rates. Read on for your March Freight Update. #TrinityLogistics #Freight #3PL #BurrisLogistics
March 2024 Freight Market Update
https://trinitylogistics.com
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Notwithstanding three attempts at GRIs (general rate increases) in 45 days, Asia-North Europe container spot rates have so far remained stubbornly low, which will make new contract negotiations onerous for carriers. 𝗟𝗼𝗴𝗳𝗿𝗲𝘁 𝗧𝗿𝗮𝗱𝗲𝗦𝗶𝗴𝗵𝘁𝘀 - Failure of GRIs means a tough time for carriers in new-contract talks (The Loadstar) 📧📞 #𝐋𝐎𝐆𝐅𝐑𝐄𝐓, the Global DIGITAL logistics company is here for you! Contact us now! 👉 https://lnkd.in/dTVaQFTk #NEOLink #logfret #supplychain #logistics #shipping #supplychainmanagement #freight #transportation #digital #freightforwarding #cargo #airfreight #transport #seafreight #export #import #projectsuccess #projectsolutions #projectlogistics #projectmanagment #projectforwarding #projectcargo
Failure of GRIs means a tough time for carriers in new-contract talks - Logfret
https://logfret.com
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Commenting on how rapidly increasing spot freight rates are diverging from contract rates, Emily Stausbøll observes that “The big shippers working directly with their carriers are probably in the best situation. A little shipper working with a SME freight forwarder is seeing a completely different picture of the market.” That said, “It’s not only the shippers, it’s also the freight forwarders that are being pushed in different ways.” Discover more from both Stausbøll and Peter Sand: https://lnkd.in/eGFfsSbx The Loadstar #carriers #freightforwarders #contractedrates
Forwarders 'being squeezed' as spot and contract rates move further apart - The Loadstar
https://theloadstar.com
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As ship capacity is sucked up in the longer transit times around Africa, it's giving carriers a convenient excuse to push outlandish spot rates. Since the market moves on predominantly contract rates, get ready for early conflated peak charges. In other words, enjoy your newly negotiated fixed rates while you have them. No doubt the carriers will keep peak season in place for many, many months. Carriers thump their chests and say that ships are full. Never mind that they have blanked over a dozen sailings to North America. As the early weeks of the contract negotiations dragged out with BCOs fighting any major increase, the carriers compromised to their detriment with still very low fixed rates. So, of course, the carriers will keep spot rates high and fixed rate allocations for forwarders low. Things are going to get ugly for the next few months as forwarders feel the squeeze of their newly awarded named account volumes. It's going to be challenging to find a home and space for all the containers praying to get out of this spot market. In the face of carriers squeezing forwarders out of the game and the spot market being in another stratosphere, shippers may be forced to look to these same carriers either through booking against their on-line spot portals or begging them for their own MQCs. But of course, with the exorbitant spot levels, don't expect much of a deal. It is hard to fathom the carriers' fierce focus solely on the BCOs that came to the table with only pressure and an unwillingness to pay more than last year's equally as ridiculous LOW rates. So, while they sold their souls to the royalty of retail, forwarders are getting their scraps. One carrier once so friendly and beholden to the NVOs, have a long-range plan to decrease their percentage of NVO business dramatically and bolster the low-paying BCO cargo. And they seem to be attempting this feat all at once in this contract season. There has always been a contentious relationship between carriers and forwarders that I do not quite understand. NVOs pay more. NVOs are stewards of millions of TEUs of small to mid-sized shippers that not only don't have the stomach to work directly with the carriers but often struggle to estimate and manage their business as tightly and with the control that a massive Big Box store does. That's where the forwarder comes in. Working with our customers in a holistic and flexible way, we bring forecasted and scheduled volumes that are equally important as well as bringing higher profit. Seems an oddity that we are seen as the red-headed stepchild. #carriers #forwarders #freightforwarding #nvocc #fixedrates #spotrates #spotmarket #contracts #negotiations #transpacific
Shipping analyst: Red Sea crisis is preventing a freight rate and liner profit collapse
https://www.hellenicshippingnews.com
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How long will shippers be able to rely on rate stability? Most likely the best determination will be the pace at which carriers exit the market. Check out the June Market Freight Update. #TrinityLogistics #FreightUpdate #3PL #Logistics https://lnkd.in/ghRCQCAd
June 2024 Freight Market Update
https://trinitylogistics.com
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