This report details best practices for contract design and negotiation, projected rate levels, and BCO-carrier expectations for collaboration.
- For the upcoming contract cycle, most beneficial cargo owners (BCOs) and other industry experts are projecting rate levels from zero to 5% above 2017.
- To nail down landed cost predictability, BCOs must design requests for proposals requiring all-in pricing that includes all accessorials and surcharges.
- While price remains the main contract driver, considerations of service dependability, customer support, technology, and carrier stability rank high on the BCO checklist. Current satisfaction levels with ocean carriers are low and declining.
- As a result of evolving carrier alliance configurations, contract negotiations must take into consideration the implications for transits, sailing frequency, and rotation changes as well as the quality of the customer service interface.
- Collaborative BCO-carrier relationships are not a given. Both parties must identify partners with the optimum mutual benefit over the long term.
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