Working Through Freight Formats with deugro’s Steffen Behrens

Thanks Leslie. Yeah, I think it's a big topic. It's a topic where everybody is trying to find the right solution, and there's a lot of trial and error in the market from our clients as well. So we work together with our clients trying to fix this during discussions and contract discussions. Eventually we want to come up with some kind of format where you can execute a project, whether it's a one-year contract project or two or three years long term. Our job is to continue our service and to continue to move freight, and obviously Corona has made this very difficult and the supply chains eventually came to a standstill. Now we're trying to figure out what is the best way forward for this not to happen again. These discussions are about great agreements linked to certain indices or different index models. I think there are a few solutions out there, but our clients need to be open to this. So I very much appreciate the panel talk today, because it's only something which you can do together with your client. It's very difficult to define this before rather than having that discussion and trying to find that solution. Absolutely.

Well, as I said, you probably start a project discussion early on. You have discussions about rate trends, where's the market currently, how can we execute. And then really it's a matter of putting something into a contract where you say, we're going to do a QBR, we're going to do six-month or twelve-month reviews, and then adjust it based on some kind of level in order to continue servicing, in order to continue to move freight at the end of the day.

Yeah, as I said at the beginning, the last two or three years have seen lots of trial and error. Is there consensus? I don't think across the board the perfect solution is out there, because otherwise we wouldn't have had this discussion today. We're working on it. As a freight forwarder being in the middle, we're constantly pitching solutions, and some work and some don't. It comes down to having a client that wants to get engaged in that discussion. Over the past years, there were a lot of lump sum turnkey projects, and in that environment, the client is not really willing to have that discussion. They want it fixed for three years without escalations. That's where it gets difficult. Now we need to see where the market is going. Are we going into a market where contracts are cost-plus again? If contracts are cost reimbursable on the EPC side, we're in a different environment. So we need to develop solutions together with our clients that hold both sides and are not just beneficial for one side of the table.

I think it's great. I remember very well the first Middle East Breakbulk event, which was in Abu Dhabi. I think it was two or three years in a row in Abu Dhabi, and now since what is it, two or three years in Dubai, if I recall correctly. If you just see the size of the event, how it's grown over the years, you can certainly see there's a lot of Middle East interest at the moment. It's just great to see. I mean, if I go on my LinkedIn, I saw in the last two weeks how many people are intending to travel to Dubai and the Middle East. I think it's great to see a lot of industry peers and former colleagues and friends. Great event.