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US shippers shun multi-year contracts in face of rate volatility
US SHIPPERS remain cautious of multi-year contracts with carrier for fear of being locked in if freights move against them.
According to the major liners, numbers of uptake for contracts of more than the typical 12 months is "very small", said Cosco executive vice-president Howard Finkel at the recent Trans-Pacific Maritime conference in Long Beach.
Maersk Line has signed few, showing that multi-year contracts "are easy to talk about, harder to do", said its North American president Michael White, reported Lloyd's List.
"In practice, two parties have to agree how you handle cost and rate differentiation over a period of years, and what mechanism you choose to deal with that," he said.
APL Americas president Gene Seroka said that a more robust mechanism to help to construct a multi-year contract is needed despite the growing number of indices measuring container freight rates. "The conversation gets a little bit deeper each year, but the mechanisms need more discussion," he added.
According to the major liners, numbers of uptake for contracts of more than the typical 12 months is "very small", said Cosco executive vice-president Howard Finkel at the recent Trans-Pacific Maritime conference in Long Beach.
Maersk Line has signed few, showing that multi-year contracts "are easy to talk about, harder to do", said its North American president Michael White, reported Lloyd's List.
"In practice, two parties have to agree how you handle cost and rate differentiation over a period of years, and what mechanism you choose to deal with that," he said.
APL Americas president Gene Seroka said that a more robust mechanism to help to construct a multi-year contract is needed despite the growing number of indices measuring container freight rates. "The conversation gets a little bit deeper each year, but the mechanisms need more discussion," he added.
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