Shippers advised to ‘check the small print’ in long-term contracts

Photo: © Rasmus Ursem By Gavin van Marle 21/05/2026 Delegates at this week’s Container Supply Chain conference in Hamburg were reminded of the importance of inserting clauses into long-term contracts that would help them navigate periods of increasing geopolitical instability. Keith Gaskin, MD of SHIFTX UK, a cooperative of small-to-medium-sized shippers that negotiate with carriers collectively, explained how he had negotiated a clause in contracts that would allow shippers to renegotiate the agreed rate if the spot market “fell through the floor”. “We were in Asia in October and November, doing our annual contracting, and there was a lot of talk about Suez reopening, and we knew what was going to happen if it did – there would be overcapacity, and we all know what what the impact of that would be. “So, one of the things we discussed was not a Suez clause, as such, but if the underlying market dropped considerably, we could have re-entry into negotiations with the carriers if there was an underlying huge drop in the rates. It wasn’t as strictly a Suez clause, it was just on the underlying rate value,” he said. The usual tactic for carriers facing sudden declines in pricing is to reduce capacity, with blanked sailings typically the first resort. HFW partner Matthew Gore told delegates that shippers could also protect themselves against these sorts of disruptions. “It’s not only the blanked sailings, but there are other instances, such as landing containers in ports where they weren’t supposed to be; so generally we encourage shippers to build provisions into their contracts which give solid undertakings and commitments from the carriers of what they will do if there is a blanked sailing,” he said. “Again, it depends how you define that, but it could be a delayed sailing, a sliding, but you need to get a solid commitment from the carrier in terms of when that container will go if it’s rolled over because of a space issue – you want a solid commitment from the carrier of which ship it’s going to go on. “Is it getting on the next ship? Is it going to go on the next fastest one? You want to get your cargo from A to B, and you want to get it from A to B reliably, so it’s getting these things built into the contracts to make sure that you’re not stuck with your cargo still at origin when it should be on the sea or at destination,” he added. However, he also warned shippers that drawing up contracts could be a hugely protracted process. “One of the things we find is the sheer amount of time and effort it can actually take to actually get a contract together. We encourage clients to work across legal procurement and logistics to get input from all of those, so all of their interests are effectively covered within the contract, but then the amount of time it will take as part of the tender process that the big shipper puts out, then for the carriers to engage to feedback for their negotiations to happen. “This is often really underestimated, to the extent where we’ve seen contract negotiations going on for longer than a year, and effectively it means that the cargo is still moving, the rates are probably being honoured, but there is no effectively contract in place to govern this. “So if either party decided to kind-of go back on their obligations, you can’t actually point to the contract and say, ‘well, this is what we’ve agreed’, because the negotiations are still ongoing. Underestimating how long it can take to get these contracts in place is one of the biggest mistakes many shippers make,” he said.

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• May 22nd, 2026
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