Good news for forwarders as carriers extend rate validity
Monday, 23 August 2010
Since early summer, rates have only been guaranteed for two weeks, making it difficult for forwarders to offer long-term deals to new customers without risk.
But sources said carriers had started to offer Asia to Europe rates with a one month validity period.
And at least one major shipping line is rumoured to be offering rates valid until the end of December, sparking hopes that others will follow suit.
Jamie Cramer, Director of IFE Global Logistics, said: “Before this year, you used to work two or three months’ validity, but the uncertainty of whether carriers could increase rates meant they would only offer validity for two weeks to leave themselves open to put in an increase if things picked up.
“When you are trying to get new business, it’s difficult, because it’s a lot of commitment to swap business on the back of an offer of two-weeks’ rates.”
One source said: “It’s been very difficult. I would like to get back to a place where a carrier gives you a rate for three months that they can control through surcharges, BAFs and CAFs, and that we can pass onto our customers.
“But there are some rates around now valid to the end of September, so I think the carriers are starting to wake up.”
Sources said carriers had been offering short-term rates because they were unsure whether prices would increase, but as it now seems this will not happen before the end of the year –Maersk, for example, has said it expected prices to decrease – they are more willing to offer rates for longer periods.
Cramer also thought rates would decrease before the end of the year.
“You’ll probably see rates coming down within the next few weeks.
“It’s long time to be on tenterhooks, but, thankfully, things are a bit more stable now and, hopefully, rates will start to go down.”
