Beneficial cargo owners (BCOs) face tougher service contract negotiations on east-west trade lanes that are “diametrically opposed” to the relative ease they have enjoyed the last two years. Philip Damas, operational head of Drewry Supply Chain Advisors, said the new environment holds fewer carrier options, tighter space availability, possibly less frequent sailings, and, ultimately, higher rates. Previous negotiating strategies that were built around the expectation of significant surplus capacity and multiple carrier options “simply won’t work next time around.”
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