“If our interest rate forecasts are not accurate, we are losing the equation and at this point we cannot adapt contracts and agreements to market conditions,” he adds. “Agreements must be written in order for both parties to be considered winners.” If you ship goods or products abroad, you must sign a contract as soon as the first negotiations are completed. However, this type of agreement or contract can be very complicated. How can the shipper and shipping company be sure that they have reached a fair, win-win and winning agreement? There are so many different marine freight carriers that travel an almost innumerable shipping lane. This means that there is no “standard” contract. They are all different because the size, route, weather, boat and goods vary at each corner. This means that each international shipping contract is different. To give you a better idea of the variability of these marine contracts, you understand that there are more than 300 different supplements that can be applied by shippers around the world. JOC.com first examined the state of immediate marine cargo in mid-2018, when only Hapag-Lloyd and Maersk offered such functionality to shippers. Since then, CMA CGM has joined this group, and about a dozen attackers have added similar features to its book of contract rates with container lines. The emergence of 3PL-targeted software-as-a-service (SaaS) tools, which allow carriers of all sizes to trade electronically with shippers, has made the concept more penetrating. Find out how your marine freight rates by supplier stand out from market prices.
Take a look at our webinar and find out how benchmarking your sea freight rates gives you transparency in your logistics and supply flow. More information. The complexity of maritime treaties requires shippers to negotiate carefully or risk being locked in an unsatisfactory agreement for a year or more. The good news is that both shippers and shipping companies are looking for more stable and simpler contracts, and have worked together to develop new approaches that benefit both parties. “Short-term contracts are a smart way,” says Stefan Weber, head of ocean procurement at Damco North America, a global supply carrier, Supply Chain Management Company and non-operator. “Shippers don`t have to close in the long run if they don`t know what might happen on the road.” A shipper may decide to enter into a contract either directly with the carrier or with an OTI (Ocean Transport Intermediary) such as a forwarder or NVOCC. Our survey showed that 33% of shippers directly have maritime freight contracts with a carrier and collectively 33% (25% with Freight Forwarder and 8% with NVOCC) had maritime freight contracts with an OTI and 34% had a maritime freight contract with a mixture of the one mentioned above.