Ocean freight can generally be booked either at the prevailing spot rate for each individual shipment, or under a longer-term contract rate negotiated with a carrier (directly or through a forwarder) for a committed volume over a set period, typically a year. Each approach trades off differently depending on market conditions and how predictable a shipper's own volume is.
In a softening or volatile spot market — closer to the overcapacity conditions discussed earlier in this series — spot rates can sometimes undercut contract rates, since contract rates are negotiated periodically and can lag a fast-moving spot market in either direction. In a tightening market, contract rates provide price and space certainty that spot bookings cannot guarantee, particularly during peak season capacity crunches.
A shipper with steady, predictable volume generally benefits from locking in meaningful contract coverage for the baseline of their shipping needs, while using spot bookings for genuine volume spikes or one-off shipments outside the contracted lanes — a blended approach rather than an all-or-nothing choice between the two.
We help clients think through this mix based on their actual shipping pattern — volume predictability, how exposed they are to peak-season timing, and risk tolerance for rate volatility — rather than defaulting either to pure spot booking or assuming a contract is always the safer choice.