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A contract customer asks to ship more than its allocation on a voyage that is filling up. This article walks through the decision, the assumptions behind it and the outcomes to choose between.

Written for: Commercial directors and trade coordinators at RoRo and PCTC carriers

Contents
  1. The scenario
  2. The decision sequence
  3. Possible outcomes
  4. Why this capability matters

A contract customer asks to ship more than agreed. The voyage is filling, and spot rates on the lane are high. Saying yes protects the relationship. Saying no may keep space for better-paying cargo, or may leave deck empty when the spot demand does not come.

There is no universal answer. There is a sound way to make the decision.

The scenario

Two numbers are easily confused here. The 80 % describes the vessel. The extra 20 % is measured against the customer's own allocation, not against the ship. Keep them apart.

The decision sequence

Deciding on volume beyond allocation

1
Confirm the capacity pictureVessel 80 % booked. Basis stated: square metres of deck or CEU, and which segment.
2
Check the contractRequest equals 120 % of the customer's allocation. What do the terms say about extra volume?
3
Compare the alternativesExpected contribution now against held space that may or may not sell.
Decision on the volume above allocation
Outcome AAccept in fullAt the contract rate or an agreed rate for extra volume
Outcome BAccept in partRest offered on a later sailing
Outcome CLater sailingAll extra volume moved
Outcome DDeclineExtra volume declined on this voyage, reason recorded
4
Record the decision and its reasonUnder the right authority, visible to sales, operations and finance
Assumptions: 80 % describes the vessel; 120 % describes the customer's allocation. Committed allocation is protected in every outcome. Figures are illustrative.
IllustrativeA decision sequence for the illustrative scenario. The right outcome depends on the contract, the space on the right deck and segment, and how likely the alternative demand is.

1. Confirm the capacity picture. The 80 % needs a defined basis: square metres of deck or CEU, and for which voyage segment. Space in aggregate does not mean the right deck, clearance or segment is free.

2. Check the contract. What does it say about volume beyond allocation? Is there a right of first refusal, a rate for extra volume, or no provision at all?

3. Compare the alternatives. Accepting fills space at the contract rate now. Holding the space may earn more if spot cargo arrives, and earns nothing if it does not. Weigh expected contribution, operational fit, the relationship and the risk that the alternative demand never comes.

4. Decide under the right authority, and record why. Sales, operations and finance should all see the same decision and its reason.

Possible outcomes

  • Accept in full at the contract rate or an agreed rate for extra volume.
  • Accept in part now, with the rest offered on a later sailing.
  • Offer a later sailing for the extra volume.
  • Decline the extra volume on this voyage, with the reason recorded.

Each outcome is defensible when the assumptions are visible. None is defensible when it depends on whoever answered the email first.

Why this capability matters

Requests beyond allocation arrive on every busy trade. Each one is small, but together they decide how much of the ship earns contract rates and how much is left for better-paying cargo. A consistent way to decide protects both the customer relationship and the voyage result.

Related reading

Review one additional-volume request

Take a recent request for volume beyond allocation. Bring the contract terms, the capacity picture at the time and how the decision was made, and we will review it against your approval rules.

Cartagena builds these capabilities together with each customer, as tailored solutions on the Microsoft platform.

Talk about allocation