Wednesday, October 13, 2010

Look at your service contract

I have mentioned before shippers/importers need to take a close look at their service contracts.

Many companies complained this last year they were unable to get space, that carriers were not honoring the terms of their contracts.

I don't know specifics, I can only offer my advice from working for both a shipper and a carrier.

Read this article from the Journal of Commerce, and in the next few days I will be offering my suggestions.

Lines learned lesson in 2009; shippers must adjust to capacity cuts, says consultant

Container lines are putting profits ahead of market share, a change that is redefining shipper-carrier relations, Drewry Shipping Consultants said in its Annual Container Market Review & Forecast.

“The basic contract between shipper and carrier should no longer be seen as a straight rate deal. … A combination of slow steaming, fewer weekly strings and increasing vessel-sharing agreements between carriers means that the traditional carrier-shipper partnership has changed forever,” said Neil Dekker, editor of the annual report.

With carriers more focused on profitability, shippers now need to think beyond the “volume is king” approach and work together with their partners on meaningful forecasts and reward-based contracts,” the Drewry report said.

click here for link

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