A Mystery Shopper survey jointly produced and funded by the Container Freight Derivatives Association and Seaintel Maritime Analysis suggests that index-linked contracts have some way to go before becoming common.
The survey included data from 60 sales offices in three regions — North and South Europe and the U.S. — from 20 carriers and non-vessel-operating common carriers. Employees with Seaintel called sales offices pretending be a shipper who wanted to ship 300 to 400 40-foot-equivalent units per month in the trans-Pacific trade if the sales office was in the U.S., or in Asia-Europe trade if the office was in Europe.
For 11 out of the 20 carriers and NVOCCs, at least one of the sales representatives said the company offered index-linked contracts. However, the results of the survey also showed that sales offices rarely offered index-linked contracts consistently across all three regions, and in even fewer cases were the responses aligned with the reply from the carriers’ headquarters. Based on responses from the headquarters, 14 out of the 20 companies do not offer index-linked contracts.
In the four cases where the answers were consistent across all three regions — Evergreen, Hanjin, NYK Line and APL — it was because they did not offer index-linked contracts. However, Evergreen’s headquarters contradicted its sales representatives, saying it does offer index-linked contracts, and Hanjin’s headquarters also said the company offers the contracts, but none so far. Furthermore, APL’s headquarters said it does not offer index-linked contracts, but would be willing to discuss it. NYK Line was the only company with matching responses from the headquarters and sales representatives. These discrepancies between carriers’ headquarters and sales representatives imply that training for representatives will be necessary before a wider proliferation of index-linked contracts can be expected.
Furthermore, out of the 30 sales representatives who said their company did not offer index-linked contracts, seven explicitly mentioned that they did not understand or had never heard of index-linked contracts before.
Of the sales representatives who said their company offered index-linked contracts, all of them, except for Maersk Line, recommended the use of the Shanghai Containerized Freight Index. (Maersk Line suggested using the Container Trade Statistics index.) However, most also said they would accept contracts linked to other indexes too. The recommendation of SCFI indicates that index-linked contracts are only signed for trades out of Asia, as the SCFI only covers freight rates from Shanghai, the report said.