# Contract Rate

*Last updated: 2026-07-19*

> Anyone shipping predictable volumes over months uses contract rates to hedge against market swings.

Anyone shipping predictable volumes over months uses contract rates to hedge against market swings. A contract rate is a contractually agreed freight price between a shipper or freight forwarder and a carrier – in ocean freight typically the shipping line – valid for a fixed term, usually six to twelve months. It is often negotiated in a tender process and, in addition to the price, frequently includes volume commitments (minimum quantity commitments) and guaranteed space. The advantage: budget certainty and access to capacity even in peak periods. The disadvantage: if the market falls, the shipper pays above market level; if it rises sharply, some carriers temporarily prioritise more lucrative spot cargo. Many shippers therefore run a mixed strategy of contract and spot shares. Not to be confused with the spot rate, the current market price for individually booked short-term transports without contractual commitment.

**Source:** [https://www.marineinsight.com/maritime-law/differences-and-correlation-between-spot-rates-and-contract-rates-in-shipping/](https://www.marineinsight.com/maritime-law/differences-and-correlation-between-spot-rates-and-contract-rates-in-shipping/)

## Quick Facts

| Property | Value |
|---|---|
| Term | Contract Rate |
| Language | EN |
| Word count | 143 |
| Last updated | 2026-07-19 |
| Source | https://www.marineinsight.com/maritime-law/differences-and-correlation-between-spot-rates-and-contract-rates-in-shipping/ |

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