Increasingly, exporters and importers trading across the Transpacific have realised that the structural shift in ocean business and the behaviour of carriers will impact 2021 tenders. But to what degree?
Trouble securing space on ships, rejected bookings, cancelled sailings, equipment shortage, volatile shipping volumes, soaring spot rates… are no longer isolated cases.
Are the numerous operational transportation difficulties experienced day-to-day, over the last 6 months, by logistics staff at Beneficial Cargo Owners caused only by short-term cyclical factors such as COVID-19 and the replenishment of inventory, or will these conditions last much longer as part of a more structural and permanent change?
Increasingly, exporters and importers believe that the structural view is the correct one and are preparing to adjust their capacity management and bid strategies before their new contracts start in 2021, with less pricing power on the BCO side than in previous years.
Key numbers on Asia-to-North America:
The carrier industry has matured and evolved from about 20 major and niche ocean transpacific carriers a decade ago to a much more concentrated carrier sector of 10 carrier groups, who are themselves grouped into 3 operational alliances.
Source: Drewry Container Forecaster
When preparing 2021 tenders as an outsourced bid management provider or when advising companies on their carrier management processes, Drewry will be focusing on a number of new parameters and priorities, including:
There is also the unavoidable question of: how much more costly will transpacific container shipping be in 2021?
In September, Drewry warned that, with Asia-US West Coast spot rates currently at $4,000 vs 2020 contract rates typically closer to $1,400-1,500, it is possible that ocean carriers will set their 2021 contract rates at $2,000 or $2,500 or even $3,000 per 40ft container in the next tenders’ season.
Transpacific Trouble - How BCOs can counter carrier pricing power as they prepare 2021 tenders
Drewry and Chainalytics invite you to a free webinar briefing to help BCOs prepare for what promises to be an especially volatile transpacific shipping season. In this practical session we will brief attendees on what market developments to expect in the 2021 ocean transportation sector and how best to prepare for and counter the unique demands this season will bring.
The Webinar will be presented by Philip Damas, head of Drewry Supply Chain Advisors, and John Westwood, Sr Manager, Chainalytics' transportation practice and will take place at 1100 US EST / 1600 UK GMT on Wednesday, 18 November and again at 1200 Singapore time on Thursday, 19 November.
The Webinar will provide insights and guidance into:
To sign-up to this webinar, click the link over your preferred time/date above.