Newsroom Blog
ONE could be forgiven for thinking that contracts in shipping are no longer worth the paper they are written on.
First we had charterers in the dry bulk sector simply walking away from unfavourable contracts at the top of the market. Now in container shipping we have lines on the transpacific trade trying to unilaterally increase rates on annual contracts just months after they were agreed.
It would certainly be interesting to be a fly on the wall when shipping line sales people meet major US shippers and try to explain that they now, in effect, want to tear up contracts they have spent months negotiating.
The position of the members of the Transpacific Stabilization Agreement is that 2009/2010 contracts were negotiated when the global economy was severely depressed and cargo volumes from Asia to the US were 20% down year on year.
This is true. But what has actually changed between then and now?
Very little, it would seem, beyond the apparently belated realisation by lines that locking yourself into a 12-month contract at rate levels that do not even cover operating costs was rather a bad idea.
In these tough economic times going back to your customers and asking them for more money is an extremely difficult proposition.
Maybe some shippers will agree, but more likely this latest statement by the TSA will join a slew it has already issued that member lines have failed to put into practice.
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