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Shippers urged to negotiate protective clauses in carrier contracts

Shippers attending the Container Supply Chain conference in Hamburg this week have been cautioned to embed safeguards in long-term contracts with ocean carriers to protect against market volatility and service disruptions.

Keith Gaskin, managing director of SHIFTX UK, a shipper cooperative, detailed how members negotiated clauses allowing rate renegotiation if spot market pricing declined substantially. The group anticipated overcapacity following potential Suez Canal reopening and secured contractual provisions tied to underlying market values rather than specific geopolitical events.

Carriers typically respond to pricing pressure through capacity cuts and blank sailings. However, Matthew Gore, partner at HFW, cautioned shippers about additional service failures, including misrouted containers. Legal experts recommend shippers insert contract provisions establishing firm commitments from carriers on service standards and operational reliability.