As the inflationary pressures on freight rates—stemming from Red Sea disruptions, front-loading and tariff-related issues—begin to ease, shippers are likely to negotiate more favourable contract rates and improved terms with carriers and forwarders for 2026.
The Drewry East-West Contract Rate Index – an average of contract rates paid by over 100 multinational shippers on 17 major ocean routes – saw a fall in the 12 months to September, the first year-on-year reduction since July 2024.
Although the decrease was just 3% year-on-year, it marks the reversal in the trend of ocean contract rates. This modest decrease will be followed by significant contract rate reductions as 2026 contracts are put out to bid and negotiated, according to Drewry’s ocean procurement experts.
Drewry East-West Contract Rate Index (December 2019 = 100)
Source: Drewry Benchmarking Club, 100+ multinational shippers
During bid negotiations, shippers frequently ask Drewry whether 2026 contract rates will return to pre-Covid 2019 levels. As of September, the Drewry East-West Contract Rate Index was still 25% above the 2019 benchmark.
When the ocean freight market is tight, carriers can push for higher contract rates, reduce their commitments, and demand greater volume commitments from shippers. However, when the pendulum swings in favour of buyers, shippers then gain leverage to secure better terms across rates, ancillary costs, space, terms and service quality,
Drewry now advises its shipper customers to review their carrier contract language to include longer payment terms, more service quality commitments and clauses to control surcharges such as detention and demurrage. In some cases, Drewry also recommends contract language to enable shippers to trigger a rate review if market prices collapse.
“Other than the prospect of lower contract rates for shippers, the other important aspect of bid strategy for 2026 contracts is risk management and resilience,” said Chantal McRoberts, director of Drewry Supply Chain Advisors, who works with shippers to plan, optimise or support ocean bids using industry best practices. “It is not just about rates,” she added.
