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Uncertainty delays Asia-Europe ocean contracting

Uncertainty delays Asia-Europe ocean contracting


Container lines on Asia-Europe appear to be expecting an improved market in 2017 as the main contract cycle for Asia-Europe rates, which usually begins late in the year, appears to have been delayed.

Patrik Berglund, CEO of rates comparison platform Xeneta, said postponing the negotiation cycle was to some extent because of market uncertainty, and the fact that liners have accepted the delay is a strong signal that they were expecting a better market to negotiate in. This was causing shippers and ocean carriers to sit on the fence for the moment.

Demand in the post-Chinese New Year period until April usually drops off steeply and drags spot rates down with it. Spot market rates serve as the starting point for beneficial cargo owner contract negotiations and container lines have been using the sustained year-over-year improvements in Asia-Europe rates to push for higher pricing and fewer perks in contracts.