Date: Tuesday, February 9, 2021
Source: Splash 247
One winner from the ongoing container crunch is the New York Shipping Exchange (NYSE), an oasis of relative market calm and certainty amid unprecedentedly fraught ocean supply chain links.
The exchange was launched in 2017 as a new way to contract ocean freight, where the shipments are guaranteed by the carrier and committed to by the shipper.
Lars Jensen from SeaIntelligence Consulting, who served on NYSHEX’s board in its early days, suggested last month that the unenforceability of contracts issue needs resolving. Shippers and carriers are at loggerheads with prices sky high and boxes severely delayed and often rolled over.
“It is a problem which haunts shippers in tight markets as we see now, and haunts carriers in weak markets. It would seem the development of a better, two-way enforceable, contract structure would be a useful path forward,” Jensen wrote on LinkedIn, suggesting something such as what NYSHEX offers could work.
Gordon Downes, founder and CEO of NYSHEX, tells Maritime CEO that the current container bull run has led to “rapid” growth for his platform, both in terms of containers contracted through NYSHEX and in terms of new shippers making two-way committed contracts through the platform.
“What is most encouraging is that despite all the volatility in the container markets during 2020, the shippers and carriers who had NYSHEX contracts benefitted from 99% compliance,” Downes says, a remarkable figure when the average booking roll-over rate was 37% according to Ocean Insights.
“After all the uncertainty and challenges shippers and carriers went through in 2020, and in light of the stability and predictability shippers and carriers experienced on NYSHEX, we expect many more shippers to take advantage of NYSHEX in 2021,” Downes says.
During 2021, Downes and team will will be rolling out more contracting tools that will allow carriers and shippers to further customise their contracts to fit their specific supply chain.
The other plan this year is to enhance the visibility that shippers have into each of their contracts, with more insight about how their own organisations are performing, as well as how their carrier partners are performing.
Downes was with Maersk for 13 years before a stint at SABMiller ahead of creating NYSHEX. Today six of the 10 largest liners have signed up to the platform along with hundreds of shippers.