Recent experience and ongoing chaos in the Red Sea have led to carriers’ customers asking, on the eve of new negotiations: “Do contracts amount to anything any more?”, reports loadstar.
Limited capacity
NNR Global Logistics’ head of ocean development, Alexander Tennant, told The Loadstar geopolitical uncertainty and the current limited capacity had given carriers “the upper hand” as negotiations loom.
He added: “I expect rates sitting higher than last year, as most lines are advising their contractual space has already been fully allocated for the remainder of the year.”
Coming out of peak season, forwarders The Loadstar spoke with noted that, “as expected”, there was a softening in the spot market.
Second Quarter
But with the second quarter buoyed by instability and carriers keeping a firm grip on available capacity – that theme carrying into Q3 – they would expect to see rates creeping back up on the approach to China’s “Golden Week” holiday.
Xeneta this week warned supply chain operators that when it came to contract talks, they should keep an eye on extreme weather, labour disputes and rising protectionism.
Pointing to the Red Sea crisis and carriers abandoning contractual commitments to recover real-time cost increases via dynamic pricing, index linking and surcharges, he said the first unknown was whether contracts “amounted to anything”.
Both Mr Hookham and another forwarder The Loadstar spoke to suggested deliveries of new ships over the next 18 months “should” ease pressure on capacity.
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Source: Loadstar
