Rethinking Freight: Why It’s Time for Smarter Contracts, Data-Driven Decisions, and a Cultural Shift in Ocean Shipping

By: Martin Coudurier, NYSHEX Director of Commercial

The container shipping industry has never been short on volatility. From the pandemic-fueled chaos of recent years to structural swings in supply and demand, from canal closures to tariffs and trade wars, freight buyers and sellers have been forced to navigate uncertainty with little more than experience, instinct, and spreadsheets.

But the time has come for a reset.

A new, smarter approach is emerging — one grounded in data, transparency, and shared accountability. At the heart of this shift are index-linked contracts, supported by reliable market benchmarks like NYSHEX’s NYFI (NYSHEX Freight Index). These tools are enabling shippers, carriers, and NVOCCs to finally break the boom-and-bust cycle that has defined our industry for decades.

The Problem: Volatility Is No Longer the Exception — It’s the Operating Environment

The shipping industry has always been cyclical. But over the last few years, volatility has become structural.

Shippers are no longer facing occasional spikes or disruptions — they’re dealing with persistent, high-velocity volatility across trade lanes, schedules, and costs. Traditional annual fixed-rate contracts, once seen as a source of stability, too often become a liability when the market swings dramatically.

In soft markets, shippers overpay.
In tight markets, fixed rates fall below spot and cargo gets rolled.
Carriers lose trust. Shippers lose predictability.
And everyone ends up renegotiating anyway.

The old system wasn’t built for the reality we’re operating in today.

The Solution: Smarter, Index-Linked Contracts

Index-linked contracts replace rigid, outdated structures with dynamic, market-aligned pricing. Instead of locking in a number for 12 months, both parties agree to a price that moves with a trusted index — such as NYFI — adjusting weekly or monthly as conditions shift.

The benefits are substantial:

1. Fairness & Transparency
   Both sides know they’re working off the actual market rate — not a guess, not a quote, not a negotiation tactic.
   
   
2. Better Planning & Budgeting
   Shippers can forecast with more accuracy using a clearly published benchmark.
   
   
3. Stronger Commercial Relationships
   When incentives are aligned, conversations shift from rate disputes to performance, reliability, and long-term partnership.
   
   
4. Reduced Risk
   Index-linked contracts eliminate the incentive to walk away when fixed rates fall far above or below the spot market.

At their core, index-linked agreements build commercial honesty into the system — something the industry has needed for a long time.

Introducing NYFI: The First Transparent, Trade-Lane-Specific Shipped-Rate Index

NYSHEX created NYFI to give the industry a reliable, objective, trade-lane-specific benchmark that reflects real freight rates — not quotes, not estimates, but shipped-on-board transactions.

NYFI publishes weekly indices across key lanes, including:

• Asia → North America
• North America → Asia
• Europe → North America
• North America → Europe
• Asia → Europe

With NYFI, shippers and carriers finally share a common, transparent understanding of market levels — the foundation for aligning expectations and building index-linked contracts that work.

How Index-Linked Contracting with NYFI Works (In Practice)

At NYSHEX, we’ve made the process simple.

1. Choose your lane:
   Select the NYFI index that matches your trade.
   
   
2. Agree on a mechanism:
   For example,
   NYFI + $50 (premium for guaranteed space)
   NYFI – $25 (discount for flexible conditions)
   
   
3. Define contract terms:
   Duration, volume commitments, service expectations — just like any traditional contract.
   
   
4. Automated weekly updates:
   Rates adjust automatically as NYFI moves, eliminating surprises.

It’s everything good about ocean contracting — without the renegotiation headaches.

The Cultural Shift: From Control to Collaboration

Adopting index-linked contracts is not just a pricing change. It’s a cultural change.

For decades, ocean contracting has been characterized by mistrust, risk-shifting, and tactical decision-making.

Today, the companies winning in shipping are taking a very different approach:

• Shippers are evolving from “cost cutters” to strategic planners managing complex global networks.
• Carriers are evolving from capacity providers to supply-chain partners focused on service reliability and long-term relationships.
• Data — not anecdotes — is becoming the foundation of commercial decision-making.
• Shared accountability is replacing the old zero-sum mindset.

This shift isn’t theoretical — it’s happening right now across NYSHEX’s carrier and shipper communities.

And tools like NYFI and PPM (Proactive Performance Management) make it possible. NYFI provides the benchmark for aligned pricing. PPM ensures both sides stay aligned on performance, allocations, and execution throughout the life of the contract.

Together, they create a fundamentally healthier commercial environment.

Final Thoughts: Don’t Just React — Redesign

Freight volatility isn’t going away. But how we manage it absolutely can change.

As an industry, we’re at an inflection point. We can keep reacting to volatility — or we can redesign our approach using smarter contracts, real-time data, and deeper collaboration.

Index-linked contracts aren’t a trend. They’re the new standard. And NYFI gives the industry the transparency and fairness it has long needed.

If you're wondering if index-linked contracts are right for you, try our contract simulator tool at https://nyshex.com/index-linked-contract-simulator 

If you want free access to weekly NYFI updates, reach out to the NYSHEX team or visit:
https://nyshex.com/freight-indices

It’s time to stop chasing the market and start shaping it.