Data reveals carrier and shipper negotiation tactics during Red Sea uncertainty

Xeneta has carried out analysis on new long term contracts entering validity in 2025 and the data reveals a fascinating dynamic in the negotiations between sellers and buyers of ocean freight due to the ongoing uncertainty in the Red Sea.

The negotiation conundrum

Ceasefire in the Middle East has raised hopes of a largescale return of container ships to the Red Sea. If this does happen, it could see freight rates collapse due to increased capacity in the market caused by carriers taking the shorter route through the Suez Canal coupled with record-breaking deliveries of new ships.

On the other hand, the majority of container ships are still sailing around the Cape of Good Hope and there is no guarantee the situation will change in 2025. With average spot rates still up 142% from the Far East to the US East Coast, 100% into North Europe and 135% into the Mediterranean, this presents a conundrum for both carriers and shippers when agreeing the ‘right’ price to strike during long term contract negotiations.

What n…