Drewry: BCOs Need to Rethink Contract Negotiation Strategy

Contract freight rates paid by Beneficial Cargo Owners (BCOs) to move their products by container have increased for a 4th consecutive quarter, shipping consultancy Drewry said.

Average contract rates on two major container trade routes, from Asia to North Europe and North America, have increased by another 4% between the second and the third quarter of this year. This means that the latest Drewry Benchmarking Club Contract Index has increased by 39% in the year to the third quarter, based on USD 2 billion of ocean freight spending.

“The container shipping market has seen a sustained, radical reversal away from the previous, long deflationary trend,” Philip Damas, Head of Drewry’s logistics practice, said.

“Not only are freight costs increasing, but rapid consolidation in the supplier base, changes in supplier behaviour and new developments in tender technology will bring real change and uncertainty to the ocean transport procurement environment,” he added.

Drewry reiterates its previous warning to BCOs that they need to re-think their contract negotiation strategy and that, by incorporating benchmarking and e-sourcing best practices, they can mitigate rate increases.

Share this article

Follow World Maritime News

In Depth>

Events>

<< May 2019 >>
MTWTFSS
29 30 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 2

GreenTech in Shipping USA Forum 2019

GreenTech in Shipping USA Forum is an event for Maritime leaders who want to unlock successful business formula of the industry!

read more >

CWC World Gas & Power Series – Brazil & the Americas Summit

CWC World Gas & Power Series: Brazil & the Americas Summit is the perfect meeting place to make contacts…

read more >

FPSO Brazil Congress 2019

Charging ahead with 24 planned orders by 2022, Brazil has once again solidified its status as one of the world’s foremost oil and gas leaders…

read more >

Nor-Shipping 2019

Nor-Shipping’s conference and event programme is tailored to deliver the knowledge, value and networking to help you build your business.

read more >