This fireside chat recap is from Day 7 of FreightWaves’ Global Supply Chain Week. Day 7 focuses on global maritime logistics.
FIRESIDE CHAT TOPIC: Contracting: the Good, the Bad and the Ugly
DETAILS: Contract negotiations between importers and beneficial cargo owners (BCOs) on one side and ocean carriers on the other are poised to take a different flavor this year because of limited vessel availability and port congestion. Steve Ferreira and Stephanie Loomis discuss the current contracting environment and how importers and BCOs should prepare for any upcoming contract negotiations.
SPEAKER: Loomis is the vice president of full container load (FCL) business development in the U.S. and Canada for Vanguard Logistics Services. Ferreira is the CEO of Ocean Audit Inc.
BIO: Loomis has been in the industry for 29 years, working for companies such as Schenker, DHL Global Forwarding and Kuehne + Nagel. She has particular expertise in expanding FCL in the trans-Pacific.
Ferreira has a 37-year background in global container shipping. He established Ocean Audit in 1994 when he realized general freight audit practices reverse no more than 50% of overcharges occurring in ocean transportation.
KEY QUOTE FROM FERREIRA
“We are at a historic moment where you should really consider the mix of … either the direct carrier [or] NVOCC freight forwarder and really start to examine the Airbnb choices out there for shipping, because I’ll tell you without that, you’re going to be really lost and confused when it comes to navigating the maze of ocean freight contracting and rate management for 2021.”
KEY QUOTES FROM LOOMIS
“This is definitely going to be a different year for a lot of importers and BCOs. Most importantly, we have to respect the fact that we are dealing with a different community of carriers right now. They’re in a very strong position. Unfortunately for those of us who are negotiating new contracts, it’s sort of like trying to buy a house at the top of the market.”
“I can’t stress enough that the most important thing that an importer or BCO can do is accurately forecast their needs going into the new contract. The best forecasters will get the best deal. That’s just going to be a fact.”
“The days of four to six weeks from China — that’s not happening right now. And it probably won’t happen for the foreseeable future.”
“All parties have to have a role to play in making the supply chains move smoother and faster. The days of being able to book just all you want and show up with just half the cargo and have the carriers be OK with that I think are over.”