Who Do You Have Your Ocean Freight Contracts With?

CMO @ Xeneta at Xeneta
Nov. 23, 2016

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Who Do You Have Your Ocean Freight Contracts With?

  1. Who Do You Have Your Ocean Freight Contracts With?
  2. Join The Conversation On Twitter @XENETA_AS
  3. About Xeneta Container Freight Pricing Transparency With One Platform In Real Time & On Demand.
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  5. Ocean freight negotiations are a source of constant tussle between shippers and their service providers. This is especially true, post 2008 where the freight rates have been on a roller coaster ride making it very difficult to work with fixed shipping costs.
  6. The volatility of the ocean freight rates may also depend on “who” the shipper has entered into an ocean freight contract with.
  7. We asked our social media community who they have their ocean freight contracts with.
  8. Our survey revealed that 33% of shippers have ocean freight contracts with a carrier directly and a collective 33% (25% with freight forwarder and 8% with NVOCC) had ocean freight contracts with an OTI and 34% had an ocean freight contract with a mixture of the above.
  9. Definitions
  10. A carrier maybe defined as an entity who undertakes to perform, directly or indirectly the carriage of cargo by sea, rail, road, air, inland waterway or a combination of these modes, normally under a contract of carriage. Carrrier
  11. A freight forwarder is someone who undertakes to handle the movement of goods from point to point on behalf of the cargo owner and assists a customer using their experience of global and local transportation, global and local infrastructure and freight documentary requirements. Freight Forwarder
  12. A NVOCC, an abbreviation for non-vessel operating common carrier, is an entity whose functional activities overlap that of a freight forwarder in some cases and a carrier in some cases, hence may be defined as a “carrier to shippers” and “shipper to carriers”. NVOCC
  13. An OTI is a collective term for a freight forwarder and NVOCC who while providing their individual services to the clients, are ultimately dependent on the carrier for the movement of their cargo. OTI
  14. No One-size-fits-all
  15. Freight forwarders that either access NVOCCS, or is an nvocc, specialize in taking the hassle out of logistics, and offer up long list of value added services such as real time visibility, guaranteed on-time delivery, port-to-port deliveries and more.
  16. Shipping lines needed to imitate freight forwarders and offer a greater range of services, as well as differentiate their offering from competitors. Rolf Niese, until recently head of logistics operations at British American Tobacco
  17. Each freight business and shipment is different and there is no fixed formula or a one-size-fits all solution for ocean freight contract negotiation. Therefore, in their own interest, it would be prudent for shippers to look at which solution fits them best, whether it is a direct contract with a carrier or a contract with an oti or a mixture of both within their various businesses.
  18. Get Better Visiblity Into Your Ocean Freight Rates Watch Our Webinar
  19. Learn how Xeneta can help You get insight and intelligence into your global ocean freight prices and change your logistics business: Request Demo Now