2008 Ocean Contract Season

February 5, 2008 by Splatty  
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It’s still early in the year, but the ocean contract negotiating season will be here before we know it. Here are a few items to be aware of before negotiating your upcoming ocean contracts.

BAF – We’ve touched upon this at length recently. Look for carriers to push hard for a fluctuating BAF in order to protect themselves from escalating fuel prices. I’m not sure what method the steamship lines will use to calculate the adjustments, but from what I am hearing we could be looking at the cost of BAF fluctuating on a monthly basis.

Supply/Demand – Look for capacity to remain tight on the Trans-Pacific trade lane even with the added capacity as steamship lines reallocate vessel strings to the more lucrative Asia to Europe lanes.

IPI Rates – We saw rather large increases in IPI rates during last years negotiations. I expect to see additional increases this year as well as carriers look cover increased costs. It will also be interesting to see if additional carriers follow Maersk’s lead by pulling out of key inland points. I expect that port to port pricing will remain relatively flat.

ILWU Strike? – We will watch this one closely as the current contract expires at the end of June.

Peak Season 2008 – Already?

Interim Ocean GRI’s

Is “peak season” a thing of the past?

Peak Season – 2007