Based upon initial feedback to The Loadstar, there appears to have been only a handful of shippers, forwarders and NVOCCs that came away from the S&P Global TPM24 conference in Long Beach, California, last week with new transpacific contracts, says an article published on loadstar website.
Summary
- Feedback from the S&P Global TPM24 conference indicates limited success in securing new transpacific contracts, with only a few shippers, forwarders, and NVOCCs able to do so.
- Some parties are waiting for the Red Sea crisis to subside and spot rates to decrease before committing to new contracts, while others were dissatisfied with carriers’ responses to their quotation requests.
- The disruption in the Red Sea has led to increased spot rates, making negotiations challenging for both carriers and shippers, with rates remaining higher than previous years.
- Industry experts predict continued firmness in the transpacific trade lane due to factors such as Red Sea instability, resilient US consumer demand, and global economic conditions.
- Carriers are laying the groundwork for future negotiations despite not aggressively pursuing new contracts at the conference.
Limited Success At TPM24 Conference
Feedback from the recent S&P Global TPM24 conference in Long Beach, California, suggests that only a few shippers, forwarders, and NVOCCs were able to secure new transpacific contracts with carriers. Many others left the conference without reaching agreements due to various factors.
Factors Influencing Decision Making
Some parties opted to wait for the Red Sea crisis to subside and spot rates to decrease before committing to new contracts. Others were dissatisfied with what they perceived as unreasonable responses from carriers to their quotation requests (RfQs).
Impact Of Red Sea Crisis And Spot Rates
The disruption in the Red Sea has led to a spike in spot rates, setting a new baseline for contract tenders. This has made negotiations challenging for both carriers and shippers, with spot rates remaining significantly higher than in previous years.
Market Outlook And Carrier Strategy
Despite the challenges, industry experts predict continued firmness in the transpacific trade lane, driven by factors such as the Red Sea instability, resilient US consumer demand, and global macroeconomic conditions. Carriers, while not aggressively pursuing new contracts at TPM, are laying the groundwork for future negotiations.
Risk Management And Capacity Considerations
Shippers were cautioned about potential capacity constraints in the future, as all sectors are currently operating at full capacity with limited redundancy. This highlights the importance of risk management and strategic planning in navigating uncertainties in the shipping industry.
Future Negotiations And Expectations
While carriers are comfortable shipping a higher percentage of spot cargo for now, they are open to future negotiations and deals as market conditions evolve. Both carriers and shippers are looking to find mutually beneficial agreements in the coming weeks as they navigate the challenges and opportunities in the transpacific trade.
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Source: loadstar
