Container shipping lines to cut free time, increase surcharges in 2021 contracts
Companies negotiating annual container shipping contracts with shipping lines before the end of the first quarter can expect increases in peak season surcharges and decreases in allowable free time with the container, as shipowners gain leverage from increased demand, industry participants say.
The widespread shortage of empty containers in Asia will compel shipowners to use their greater bargaining power to finally slash free time, the number of days a beneficial cargo owner is given to return a container to the owner, Stephanie Loomis, Vanguard Logistics Services vice president, said during a panel discussion at the virtual TPM conference.
Persistently tight containers market expected into 2021 as contract talks evolve hellenicshippingnews.com - get the latest breaking news, showbiz & celebrity photos, sport news & rumours, viral videos and top stories from hellenicshippingnews.com Daily Mail and Mail on Sunday newspapers.
Service commitments, not prices, to take center stage in 2021 container term talks: sources
After the uncertainty that dominated the container markets through most of 2020, service commitments, rather than prices, are expected to take the center stage in the next year’s term contract negotiations, according to sources.
“Going forward, even if a contract costs $100 per TEU [20 foot equivalent unit] extra, shippers won’t mind as long as it gives them a guarantee on price and space, a source based in Singapore said.
Some companies that pay a premium on term contract rates have different perks such as their own block storage on vessels, their container storage at the port, according to Stephanie K Loomis, Vice President FCL Product, US and Canada, Vanguard Logistics Services. Their containers don’t get mixed in with others. These kinds of services is what people are going to talk about now, she said.