Freight rates are beginning to ease, signaling a shift in the balance of power from carriers back to shippers, which is expected to result in significantly more favorable contract rates and terms for 2026.
Reversal in Contract Rate Trend
The Drewry East-West Contract Rate Index—which tracks rates paid by major multinational shippers—has recorded its first year-on-year reduction since July 2024. The index fell a modest 3% year-on-year in the 12 months leading up to September. This decrease marks a reversal of the upward trend in ocean contract rates. According to Drewry’s experts, this initial dip is expected to be followed by significant contract rate reductions as negotiations for 2026 contracts commence. Despite the recent fall, the index remains 25% above the 2019 pre-COVID benchmark.
Shipper Leverage and Improved Terms
When the freight market tightens, carriers gain leverage to demand higher rates and volume commitments while reducing their own service commitments. Conversely, as the market pendulum swings toward buyers, shippers gain the power to secure much better terms across several critical areas:
- Rates
- Ancillary Costs
- Space Guarantees
- Payment Terms
- Service Quality
Recommendations for 2026 Bid Strategy
Drewry is advising its shipper customers to strategically leverage this shift in market power to improve their contract language and enhance overall risk management.
- Contract Clauses: Shippers are encouraged to negotiate and include clauses for longer payment terms, greater service quality commitments, and better control over surcharges like detention and demurrage.
- Rate Review Trigger: Drewry also recommends including contract language that allows shippers to trigger a rate review should spot market prices collapse significantly.
- Risk and Resilience: Beyond securing lower rates, a key component of the 2026 bid strategy must be focused on risk management and resilience, ensuring stable supply chains amid potential future disruptions.
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Source: Drewry
