The Danish maritime data analysis company, Sea-Intelligence has reported that in the US, the service contracts between shippers and the carriers have made a significant shift from the regular patterns and must be submitted to the Federal Maritime Commission (FMC). Although these contracts are confidential, the FMC discloses data on the number of contract filings as well as the number of amendments.
According to Sea-Intelligence, , due to the contract negotiation cycle present in the US, there is a peak in contract cases in April-May each year. This has changed since the last months of 2020, with an increase in contract filings and a decrease in the number of amendments.
Under normal market conditions, 41% of the initial filings are made in the period April-May with “shoulder season” in March and June, while most other months have a filing share of about 5%.
“However, in 2020 we see a large shift in November and December – this is reflective of the very large rate increases seen on the Transpacific, prompting a substantial number of shippers to negotiate new service contracts for 2021 at a much earlier time than usual, in order to safeguard against further market disruption,” pointed out Alan Murphy, CEO of Sea-Intelligence.
“Then in 2021 we see an even more extreme shift, as a staggering 38% of all original filings are made in December 2021, clearly in an effort by the shippers to pre-empt more disruptions in 2022,” he added. While a drastic change in the contractual relationship between shippers and carriers is evident, what is not certain is whether this change is temporary or a harbinger of a more fundamental shift in US markets in the future.
