Ocean Carriers Get Tough on Freight Rates — But Can They Hold the Line?

An endless series of crises roiling ocean shipping in the post-COVID 19 era is resulting in a change in “carrier DNA.”

So said a panel of experts at S&P Global’s TPM 2025 conference in Long Beach, California.

Panelists said container lines today are undergoing a radical shift in their basic assumptions about how to service the oceangoing trades. For decades, they concentrated on securing freight and market share for their ever-larger ships, even if that meant slashing rates well below profitable levels. Now, there’s a “top-down boardroom mindset that ‘We can make money,’” said Bob Fredman, principal with logistics consultancy SF Global Insights, LLC.

Carriers are focusing now “on yield management, bottom-line cost containment and deployment of tools within their organization that they didn’t think of before,” Fredman said. That includes stricter enforcement of space allocations to shippers under annual service contracts.

Stephanie Loomis, an ocean product and logistics professional, said carriers are especially exercising greater oversight of non-vessel operating common carriers, who consolidate the business of multiple smaller shippers into one contract. “Carriers are much more in tune with how NVOs are doing business,” she said, including forcing them to tender a certain portion of their freight under higher spot rates.

“It used to be not uncommon to see an importer who moved 1,000 TEUs [20-foot equivalent units] capture a named-account rate close to what a large BCO [beneficial cargo owner] would be paying,” Loomis said. “Those days are gone — absolutely gone.”

Robbert van Trooijen, founder of global investment firm Inception Partners, suggested that the sea change in carrier pricing can be traced to several years before the COVID-19 pandemic struck, with the first outbreak of a U.S.-China trade war that has since heated up significantly. Then,