It is no surprise that shippers want the best ocean freight shipping rates possible. That is why many shippers might speak directly to a carrier about signing a long-term shipping that usually lasts 12 months. The good news is that the contract provides some fixed prices for certain surcharges. However, there are numerous problems with some long-term contracts. The international shipping market prices are constantly changing and some shippers who sign a long-term contract might feel the sting because they won’t be able to take advantage of lower prices when they become available. There is a lot of volatility in the shipping market.
For those reasons, short-term contracts might be better. After all, the prices keep fluctuating. One short-term option is to receive quotes “on the spot”, which means the spot rates. Generally speaking, spot rates are lower than most contract rates. Each spot rate is unique and based on the port, the number of containers, the commodities and the timing involved.
The Shanghai Containerized Freight Index (SCFI) calculates most spot rates on a weekly basis. In December 2014, the spot rates increased 19% on the West Coast and 8% on the East Coast. And if you look at year over year, the West Coast spot rates increased 33% and the East Coast spot rates increased 47%. The carriers maintain a bigger control on the East Coast and thus can greatly impact these prices.
Getting a spot rate today is rather easy. Simply speak to a trusted freight forwarder about your shipment and you can easily retrieve one of these spot rates.