Drewry: Benchmarking Grows in Ocean Transport

Illustration; Image Courtesy: MSC

International transport and logistics executives are increasingly benchmarking their companies’ costs and supplier terms in ocean transport contracts, according to shipping consultancy Drewry.

In the past 6 months, the ocean transport spend under carrier contracts benchmarked by beneficial cargo owners (BCO) increased by 50% to USD 2.2 billion. The number of benchmarked routes rose by 81% and the volume of benchmarked dry container TEU jumped by 67%.

“Benchmarking ocean contract rates, supplier transit times and contractual terms such as demurrage and detention is becoming more established, as BCOs realise the importance of benchmarking for setting target rates, negotiation and rate reviews, particularly when markets are volatile,” Philip Damas, head of Drewry’s logistics practice, said.

Drewry has seen a change in the attitude of some BCOs, who were initially sceptical about comparing their contract terms confidentially with those of other companies and said that they already benefitted from very favourable terms.

As the BCOs’ competitive pressures have increased and as contract rates have stopped declining, transportation executives have become more open to the use of peer-to-peer groups to identify the most favourable terms of cost and service and to monitor their own performance as buyers against companies moving the same volume of freight under contract.

Using spot rate indices, many BCOs are also benchmarking their rates against spot international ocean freight rates and spot international air freight rates.

Share this article

Follow World Maritime News

In Depth>


<< Mar 2018 >>
26 27 28 1 2 3 4
5 6 7 8 9 10 11
12 13 14 15 16 17 18
19 20 21 22 23 24 25
26 27 28 29 30 31 1

Singapore Maritime Technology Conference and Exhibition (SMTC) 2018

The 3rd Singapore Maritime Technology Conference and Exhibition (SMTC) 2018 is organized by the Maritime and Port Authority of Singapore…

read more >

Shippax Ferry Conference 2018

The two-day onboard ferry conference was first organized in 2003 and grows ever more popular with some 400 delegates from over 40 ferry…

read more >

8th Dredging & Land Reclamation World Summit 2018

The 8th Dredging and Land Reclamation Summit 2018 will gather the decision makers from Authorities and Operators responsible for ports…

read more >

Shipping 360

This course is ideal for those who have recently joined the maritime sector and those who need to have a better understanding…

read more >