ports

Shippers Urged to Add Rate Renegotiation Clauses to Long-Term Carrier Contracts

At the Container Supply Chain conference in Hamburg, industry experts reminded shippers to scrutinize contract language with ocean carriers given ongoing geopolitical instability. Keith Gaskin, managing director of SHIFTX UK, a shipper cooperative, said his organization successfully negotiated clauses allowing rate renegotiation if spot market pricing drops significantly. During annual contracting in Asia in October and November, discussions centered on potential Suez reopening and resulting overcapacity. Gaskin noted the mechanism triggers on substantial underlying rate declines rather than specific geopolitical events. Matthew Gore, an HFW partner, advised shippers to build protective provisions into agreements beyond rate adjustments. Carriers typically respond to pricing pressure by blanking sailings, but shippers also face risks including unexpected port diversions. Industry experts recommend comprehensive contract provisions establishing clear commitments and safeguards.