Small and midsize enterprises (SMEs) relying on ocean transportation know that since before the pandemic, opportunities to secure direct access to ocean carriage at predictable costs have been diminishing. Service contracts that guarantee some amount of space and commit to rates for a practical time period, say 12 months, were once generally available to the shipping public.
Today, however, most SMEs are excluded thanks to the increasingly prevalent prerequisite set by ocean carriers for consistent weekly shipment volume commitments in single port and/or port lanes.
Remember carrier tariffs? This is where ocean carriers, by law, publish rates, surcharges and rules. While technically still in force, tariffs have become overshadowed by online quotation systems promoted by ocean carriers. While these appear attractive, they offer real disadvantages to the shipping public when they’re the only means of securing carriage.
Login access is required, meaning that offers are potentially specific to the asker, unlike a public tariff that is equally available to everyone. Rates offered are dynamically generated and tend to be valid only for an immediate or limited number of voyages, allowing quotes to reflect short-term space availability, a process that doesn’t necessarily meet a shipper’s desired timeline “from quote to shipment” and may also inherently inhibit their comparison of rates across carriers. Accepted rates become mini service contracts, avoiding tariff publication regulations that prohibit increases to rates on less than 30 days. And each mini service contract has — often extensive — terms and conditions (T&Cs).
Sure, we all blindly click “accept” boxes but not when it comes to our companies’ budgets and liability. When traditional service contract negotiations can have months of deliberations over T&Cs, a “tick-the-box” option seems inappropriately peremptory.
Perhaps it’s time to reconsider carrier tariffs, but any next generation must be at least as meaningful to the business needs of shippers as it is of carriers.