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Economic Integration

Checklist Created To Aid Contract Talks Between Exporters and Carriers

Supply Chain

The Westbound Transpacific Stabilization Agreement (WTSA), a loose organization of 10 container lines providing cargo service from US inland points and ports to Asian markets, has developed a "best practices" checklist for export contracting.  The list is intended to be a reference tool to ensure that all potential issues and concerns are addressed when export cargo contracts are negotiated between shippers and carriers.

Key points covered on the checklist, which have been of recent concern to carriers and shippers in the export trade, include volume commitment, rate applicability, surcharges, fuel surcharges, service, and dispute resolution, as well as other issues.

The organization acknowledges there is no guarantee exporters and carriers will agree on every part of the checklist, but suggests that it should offer a good, single source of guidance for consideration and discussion during the course of contract negotiations.

According to the WTSA’s website, the document, formally entitled a Service Contracting Process Checklist, was developed by the organization with the assistance of its Shipper Advisory Board.  The board’s purpose was to “open an ongoing dialogue that would strengthen shipper-carrier relationships and identify industrywide best practices, particularly in the service contracting process.”  Established in September 2010, it is a discussion forum 16 shipper members representing a cross-section of the US-Asia container freight market, along with the 10 WTSA member lines.

Questions:  As the global supply chain becomes more complex, what other parts of the chain could benefit from a comparable checklist?

With respect to the exporter and carrier checklist, what other issues should be added?

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