The annual U.S. line contract price negotiations are coming soon, and market analysts recommend that shippers lock in space as early as possible instead of paying too much attention to freight rates. Dominique von Orelli, DHL’s global head of ocean shipping, said that some contracts have been concluded at quite high prices because shippers are more worried about space rather than freight rates, and what they need is a flexible supply chain.
Orelli believes that the era of low shipping costs is over. The current strategy of betting that freight rates will fall back is unwise unless cargo owners are willing to risk market volatility. Cargo owners should sign contracts with operators or agents as early as possible. For cargo owners, a flexible supply chain is obviously more important than low cost, because the lower the freight, the less space can be guaranteed. He also urged operators to strictly implement the contracts they have signed. Orelli believes that both parties to the contract need to treat breach of contract more strictly, and punitive measures must be effective. To achieve this, cargo owners also need to be able to predict demand more accurately. Although this is difficult and not the industry’s strength, this work must be taken seriously. In return, operators should provide better services to cargo owners or shippers who can provide accurate forecasts. Orelli predicts that market capacity will continue to be tight in the future. He pointed out that for the supply chain to return to normal, efforts from all parties are needed.
The congestion situation at U.S. ports has not yet been substantially improved
According to analysts, Sea Intelligence’s on-time delivery rate accounted for only 34.9% in January 2020, setting a record low for the sixth consecutive month.
With factories and terminals in Asia operating 24/7 or 168 hours a week, the situation is unlikely to ease anytime soon, while container terminals on the U.S. West Coast, berths The weekly working hours are 112 hours, while the daytime working hours at the container terminal and onshore are 88-90 hours.
Low productivity in the United States compared with Asia has led to backlogs in Southern California. </p
