Drewry, the leading global shipping consultancy, today announced that ocean freight contract rates are set for a substantial downturn in the 2026 negotiation cycle, signaling a major power shift back to shippers after years of inflationary pressures.
Drewry’s analysis indicates that the factors driving up freight costs—including Red Sea disruptions, cargo front-loading, and tariff-related issues—are beginning to ease. This relief is expected to translate into significantly more favorable contract rates and improved commercial terms for shippers working with carriers and forwarders for the coming year.
The Drewry East-West Contract Rate Index, which tracks contract rates paid by over 100 multinational shippers across 17 major ocean routes, recorded its first year-on-year fall since July 2024. Although the initial decrease was a modest 3% in the 12 months leading to September, Drewry’s ocean procurement experts anticipate this reversal will be followed by steep contract rate reductions as 2026 contracts are put out to bid and negotiated. As of September, the Index remained 25% above its pre-COVID 2019 benchmark, indicating considerable room for negotiation.
During market tightness, carriers typically secure higher rates, reduce their commitments, and demand greater volume guarantees. However, with the market pendulum swinging in favor of buyers, shippers now gain considerable leverage to secure better non-rate terms across the board, including:
- Improved Service Quality Commitments
- Longer Payment Terms
- Tighter Control over Ancillary Costs such as detention and demurrage surcharges
Drewry now advises its shipper clients to proactively review and revise their carrier contract language. This includes adding specific clauses that allow shippers to trigger a rate review if market prices collapse, maximizing flexibility and cost control.
“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 and optimize ocean bids. “It is not just about rates.”
Drewry emphasizes that a comprehensive 2026 bid strategy must prioritize securing robust service and contract terms alongside achieving cost savings to build greater supply chain resilience.
