OCEAN freight analyst Sea-Intelligence has reported a sharp increase in service contracts filed with the Federal Maritime Commission in the United States.
According to Sea-Intelligence, the contracts themselves are confidential, but the FMC provides information on the amount of contract filings as well as the number of amendments.
The analyst said it sees a peak in the contract filings in April and May every year because of the contract negotiation cycle in the US.
It changed from late 2020, with a spike in contract filings and a decrease in the number of amendments.
Sea-Intelligence CEO Alan Murphy said under normal market conditions, 41% of the original filings are done in the April and May period with a “shoulder season” in March and June.
“Most other months have a filing share of around 5%,” Mr Murphy said. “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.
“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.”
Mr Murphy said while there has been drastic change in behaviour in terms of the relationship between shippers and carriers, analysts are uncertain whether the change is temporary of a harbinger of a more fundamental shift in the US markets going forward.