CURRENT TRANSPACIFIC CONTRACT RATES: TIME IS RUNNING OUT Here are the best questions to ask to ensure that your 2018/2019 contract negotiations are a success.
e are halfway through the 2017/2018 trans-Pacific contract season, and it’s time to start asking some serious questions regarding your contract rates to guarantee successful 2018/2019 contract negotiations. 1. Am I on track to meet volume commitments this year? 2. Are my carriers performing at their peak? 3. What peak season issues could I potentially run into? 4. How do my contract rates compare to the market rates? 5. Should I outsource for my tender next year? 6. If so, what type of company should I consider?
Shippers and carriers alike need to be prepared for significant competition. They need to be aware of new capacity and the balance of supply and demand that hasn’t been factored in, in addition to how the market will affect contract rates. In addition, there is still a large amount of new vessel supply that is expected to make its way into the market over the next two years, and, with the alliance reshuffling being triggered by last year’s carrier consolidation, we can expect that changes are going to happen.
and vessel optimization. The better the forecast, the more a carrier will enjoy doing business with you time and time again. Increase communication with your carrier throughout the year regarding volume forecast changes. You will see a better mutual understanding and improved efficiencies.
AM I ON TRACK TO MEET VOLUME COMMITMENTS THIS YEAR?
Carriers typically look for shippers who can provide a good forecast of volumes throughout the year to assist with planning of both equipment availability
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TIP: You should at a minimum conduct quarterly review discussion with your carriers to ensure continued understanding of each other’s needs and requirements.
ARE MY CARRIERS PERFORMING AT THEIR PEAK?
In addition to reviewing changes in sourcing that may affect the way you fulfill your volume commitments during these quarterly meetings with