This fireside chat is a recap from FreightWaves’ OceanWaves Summit on Wednesday.
FIRESIDE CHAT TOPIC: How much volatility can the ocean market take?
DETAILS: The risk of the market turning against you is ever present in negotiating ocean shipping contracts, and that can chill relations between shippers and carriers, both looking for an advantage. Longer contracts in the wake of severe disruption may become a more-or-less permanent solution to bring predictability and accountability to contracts.
SPEAKER: Gordon Downes of the New York Shipping Exchange (NYSHEX)
BIO: NYSHEX CEO Downes speaks with Patrick Duffy, president of the Blockchain in Transport Alliance (BiTA), about the challenges facing shippers and ocean carriers. Downes discusses how risk management in ocean logistics through the use of enforceable freight contracts and technology can enhance shipper-carrier relationships.
VIDEO GOES HERE
KEY QUOTES FROM DOWNES:
“Like electricity and water, you don’t really pay too much attention to it until it stops working, and then it’s a serious issue. And I think that’s true with shipping. Now that there’s some challenges, it’s become the topic du jour.”
“Regardless of whether you’re a shipper or a carrier or regardless which side of the table you’re sitting on, there’s always risk that once you’ve signed that contract and you finish that negotiation, that the market is going to turn against you. Until this most recent disruption in the supply chain, a lot of shippers had always taken for granted that it’s better to be a shipper [because] you can always squeeze some additional cost out of your contract because the market is likely to turn in your favor. I think we can see now that’s not always going to be the case going forward.”
“What we see now is that it can be quite risky going through the contracting cycle. There are many advantages to contracting longer term. There’s cost and effort that goes into that and more predictability in your supply chain, etc. I think the contracting season may still be around. It may just be a little early sometimes and contracts might extend in duration.”Gordon Downes, CEO, New York Shipping Exchange