As many as 52 percent customers are negotiating for one year, as usual, while 19 percent are negotiating for one year but with index-based adjustments, says the latest update from Xeneta.

While 13 percent are negotiating for 3-6 months, 10 percent are continuing to use only the spot market , the update added.

"Most customers negotiating their RFQ cycle on an annual basis are doing so likely in the interest of predictability in the softened market. The strategy of longer duration contract negotiations is consistent with the pre-pandemic market levels and communicates a less opportunistic attitude from shippers."

To draw a correlation between decreased capacity and rates, Xeneta customers were asked to forecast their volumes for Q12023 in comparison to 2022:

Most shippers and freight forwarders are seeing capacity having varied by only 10 percent while 38 percent of customers expect a decrease of 10 percent or more in their capacity. "With this consensus from large-volume shippers, the outlook painted for carriers remains quite grim. The customer consensus of decreased capacity was reflected directly when evaluating China Main–North Europe Main and North Europe Main–U.S. East Coast Main."

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