Newsroom Blog
MARGINS are being squeezed throughout the transport chain so it is perhaps unsurprising that re-negotiations are the order of the day.
We have seen the container sector try its best to sweet talk yards into delays or cancellations, with limited success, and rumours suggest that many are busy clocking up air-miles with a second attempt at the fragile negotiations.
But it is not just the headline issue of box overcapacity that has prompted companies to take a second look at contracts and prices agreed in better times.
One port boss recently visited by Lloyd’s List complained that his office carpet was rapidly becoming threadbare thanks to the never-ending march of customers knocking on his door with urgent requests to look again at existing contracts.
It had not escaped his attention that the same people had not been quite so desperate to talk about financial compensation when the market was stacked in their favour
The reality of the current market means that nothing is as secure as it once was and most agreements are open to debate, particularly if enough financial pressure is applied in the right places.
In some cases the financial imperative to reduce costs has resulted in existing agreements being put out for tender, and market competition has offered a good deal all round. In other cases riskier strategies are being employed, and one wonders how sustainable such practices will be once the market picks up.
Short-term survival is one thing but long-term relationships count for a lot in the shipping business.
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