Expert view: Negotiating confidently as sea freight shipper

Clemens Schapeler, Manager MII Global Ocean Transport, in DVZ No. 50

In container shipping, shippers are currently facing major challenges: Transport capacity rates for imports from the U.S. exploded by about 100% to a new record level of about $3900 per 40' container, where they have remained since early October. 

Demand for empty containers is also very strong. The demand for empty containers in China is currently so high that shipowners would rather forego reloading than accept a time-consuming detour of the containers to agricultural exporters in the American hinterland.

At the beginning of November at the latest, this bottleneck has now also spread to the China to Europe trades, where it has also led to an increase in spot rates. Although we are still a long way from a new price record, the current level was last reached in 2016.

Shippers with annual contracts benefit from a significantly lower rate level compared to the spot market, but often have problems actually getting the contractually agreed volumes onto the ships, not to mention any additional volumes.  This is generally attributed to the fact that, in case of doubt, shipowners give preference to the much more profitable spot containers

At the same time, against the background of high spot market rates, the pressure on contract rates is also increasing, as shipowners and forwarders are trying to enforce surcharges (peak season surcharges) on current contracts and are entering into negotiations on new contracts with high incoming bids. 

Shippers are therefore faced with the challenge of ensuring the smooth handling of current transports and meeting the demands of their service providers for significantly higher rates.

The article "Selbstbewusst verhandeln" was published on December 9, 2020 in the German transport newspaper DVZ No. 50. Read how Clemens Schapeler, Manager of Market Intelligence Global Ocean Transport, assesses the current situation in the ocean freight market.

You can find the article in German here.