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Shippers Reassess Strategy in Trans-Pacific Negotiations

(Peter Leach – Journal of Commerce)

With West Coast port congestion and container backlogs easing faster than predicted, beneficial cargo owners are reassessing their supply chain strategies for the coming shipping season.  

BCOs that had approached their trans-Pacific contract negotiations with an eye toward shifting more cargo to the East Coast may be looking again at keeping more on the West Coast where vessel overcapacity will continue to keep freight rates low.

“This will lead to an interesting situation as BCOs negotiate their contracts,” said Brian Nemeth, director at AlixPartners’ Hong Kong office. “Shippers are expecting rate to go down because of continuing overcapacity and lower bunker prices, while carriers are entering contract negotiations with the position that ocean rates should go up. What we will see over the next few weeks is how this plays out.” Click here t read more.