Ocean carriers are tempting Beneficial Cargo Owners with a wide range of new, flexible, long-term contract options this year, after last year shippers were presented with ‘take it or leave it’ fixed-rate long-term contract options by carriers, against a backdrop of very strong demand and an acute shortage of equipment and vessel capacity. The second half of 2022 saw container spot rates collapse to levels well below contract rates, due to both a consumer demand slump in Europe and the US, and supply chain congestion that eased around the world, leaving signed-up shippers at a significant disadvantage to competitors using the spot market. The widening gap between spot rates and contract prices demanded a flexible and immediate response by carriers: lines adopted a case-by-case attitude to shipper requests to renegotiate contracts, agreeing reduced rates and waiving some terms and conditions in most cases, but progress is very slow. Now, even Maersk, one of the architects of the inflexible multi-year contracts rolled out to selected blue-chip shippers a year ago, has recognised the need for more adaptability in long-term contract terms and conditions: Maersk has widened its contract product portfolio and customers can now choose the products that fit their business needs the best, be it fixed or floating rate, flexible space allocation, etc. Many of Maersk’s peers will likely adopt a similar approach to the 2023 contract season.
