Spot Freight rates are ocean freight rates charged by ocean carriers from port to port generally for one shipment, specific vessels or in some cases a short date range depending on market conditions..
While currently the spot rates are on the downward trend, it is important to note that spot rates do not have any guarantees as various events like bunker prices, blank sailings, port congestion, strikes and many other factors can influence spot rates.. Spot rate customers are also the first customers likely to be sacrificed by carriers based on existing market conditions at the time of shipment..
Contract rates which are currently higher than spot rates on specific routes, refer to ocean freight rates with validity typically longer than 3 months or more, negotiated with ocean carriers based on a volume commitment or tier based, depending on the market, carrier and customer..
Contracts are preferred by certain customers and definitely preferred by the carriers because this gives carriers base volume commitments while customers may have the option of protected space and equipment and shipment guarantees given by carriers..
Well, the above is the THEORY.. Since the pandemic however, practice has been different with both rates having had their own ups and downs, broken promises, broken guarantees, and unpredictability..
Join experts on either side of the rate divide on the 7th of September 2022 – 10:00 (US Eastern Time) as they analyze the impact of spot rates and contract rates in the current period and where it is headed..
The panel will discuss:
– Prevalence and credibility of spot rates
– Impact of spot rates on inflation
– Who benefits most from spot rates and contract rates..??
– What drives pricing in the container shipping sector..??
Moderator – Hariesh Manaadiar – Founder of Shipping and Freight Resource
· Shabsie Levy – CEO/Founder of Shifl
· John D. McCown – Founder of Blue Alpha Capital
· Stephen Nothdurft – Vice President, Sales, North America – MOL Consolidation Service
Click here to register or click on the button below..
The post Spot or Contract Rates – Which is the lesser of the two evils – The Great Debate appeared first on Shipping and Freight Resource.