An investigation by SeaIntel into liner carrier and freight forwarder knowledge of index-linked ocean contracts found a lack of consistency, and in some cases, lack of knowledge, about the instruments among sales offices.
SeaIntel, aided by the Container Freight Derivates Association (CDFA), posed as a shipper representative and contacted sales offices in the United States and Europe in a “mystery shopper” setup. The 20 global carriers and forwarders examined included Maersk Line, Mediterranean Shipping Co., CMA CGM, Evergreen, COSCO, Hapag Lloyd, Hanjin, APL, CSCL, MOL, OOCL, NYK, "K" Line, Zim, Hyundai, UASC, Kuehne + Nagel, Panalpina, CEVA Logistics and Geodis Wilson.
The lines and forwarders were questioned about their index-linked offerings, and how familiar their sales representatives in North American and Europe were with concept of index-linked contracts (ILCs).
“Our mystery shopper program shows that for 14 out of the 20 companies, at least one sales representatives or the head office said that their company offered ILCs,” said SeaIntel Chief Operating Officer and Partner Alan Murphy. “However, of the 20 companies, only NYK answered consistently across all three sales offices and the head office, all agreeing that ILCs was not something NYK offered.”
SeaIntel found 20 percent of the sales representatives contacted never replied, “despite a clear promise to the customer to do so.”
Of the 44 sales representatives who answered SeaIntel’s questions, 15 percent explicitly mentioned that they had never heard about ILCs or did not understand the concept. Murphy said one of the main obstacles for index-linked contracts in the container industry is sales representatives’ unfamiliarity with such instruments.