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The Original Sin of Shipping

"If there is one original sin of the industry, it’s a fundamental lack of integrity in freight contracts."

I wish I could take credit for it, but I can't. This accurate quip by Peter Tirschwell came about during a JOC interview with our CEO, Gordon. Indeed, so many of the inefficiencies that plague shippers and carriers today stem from that tempting tree and its fruit that we all tasted. Now, with $23Bn in annual waste caused by broken ocean contracts, we have found ourselves disappointingly far from Eden.

Peter goes on to say, "Fixing the chronic overbooking and no-show issue, in turn, opens the door for carriers to price dynamically based on micro-factors, such as supply and demand on an individual vessel or the actual cost of supplying a container to a particular shipper, improving profitability... Digitalization will allow for game-changers, such as the ability for mutually enforceable transactions, to become the industry norm."

Some may fear the changes associated with digitization, but ask any member of NYSHEX who has experienced the alternative to broken contracts and they'll set your mind at ease that it breathes new life into supply chains. In fact, NYSHEX numbers prove it.

Guarantees are no longer just for spot cargo

NYSHEX may have started out with a solution addressing the unreliable spot market, but you may be surprised to learn that spot is less than 10% of the cargo we handle today. In fact, average volumes per NYSHEX contract have risen from 37 containers in Q1 2019 to 466 containers in Q1 2020. That's 12X growth.

The rise in volume per contract is a trend we've been observing since the April 2019 inception of contracts we call "Block Deals." Our members, who may have even started out just buying spot contracts, have seen the benefits of guaranteed space, competitive, locked-in pricing, and the outsourcing of exceptions. They've begun to demand the same standard for their regular contract cargo.

As the JOC article pointed out, "these numbers prove that mutual enforceability is extending from spot into the contract environment." And this is a great thing for our industry.

Block Deals Inspired by Equity Markets Are Transforming Shipping

Transitioning from 15 years of working for an ocean carrier to a financial technology company, I had a lot to learn about Wall Street, exchanges, and how markets function. I mean, I'm a business major with a well-performing E*trade account, but even after three years in the Financial District with NYSHEX, I still have aha moments as I observe firsthand, the fundamentals of financial exchanges making shipping less erratic and frustrating for all of us.

International Women's Day Spotlight

We have an epic team at NYSHEX! To celebrate International Women's Day, we interviewed two of our powerhouse NYSHEX women to ask them their thoughts about the future and what they would say to the next generation of women in shipping.

De-Risking Your Supply Chain: Protecting Against Pandemic Panic

It would be unwise to approach the Coronavirus or COVID-19 with anything less than caution and vigilance with more than 126,000 confirmed cases and almost 4,600 deaths globally to date. We’re witnessing in real-time, the impact of the virus’s spread; from travel bans, empty retail shelves, complete lock-downs and the cancellation of gatherings like TPM20. As the virus, and the associated fear, spreads, containment controls and their consequences are likely to become more severe.

NYSHEX Expands Carrier Network with Addition of Ocean Network Express

ONE joins a group of innovative carriers who use NYSHEX to offer their customers the ability to enter digital and mutually enforceable contracts. With seven of the leading global ocean carriers on NYSHEX, over 60% of global capacity is represented. The member carriers also represent all three container shipping alliances: 2M, Ocean Alliance and THE Alliance, providing NYSHEX shipper members a broad array of service options to choose from.