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The last few years have been a stress test for global supply chains. Rates surged to historic highs, collapsed just as quickly, and never fully returned to predictable patterns. Even the most experienced procurement teams found themselves navigating a market where traditional tools did not match the speed or volatility of the real world.
What has become clear is that freight procurement is no longer just a process. It is a resilience strategy. And that strategy is now undergoing one of its biggest shifts in decades.
Index-linked contracts are moving from niche concept to mainstream conversation. Not because they are a buzzword, but because many organisations are realising that the old way of contracting is built for a market that no longer exists.
This is the moment where chaos gives way to clarity.
The RFQ cycle is breaking under pressure
The tendering model that global shippers relied on for years depends on one assumption: that the market will remain relatively stable between contract signature and contract expiry. That assumption no longer holds.
The results are visible everywhere.
Tender cycles are too slow
Many teams spend four to six months running a process intended to secure twelve months of pricing. In reality, they often end up renegotiating after only a few months because the market has already shifted.
Contracts are not holding
When rates rise sharply, carriers add surcharges or struggle to deliver capacity. When rates fall, shippers feel trapped in contracts that no longer reflect the market. Both sides end up frustrated.
Reactivity replaces strategy
Procurement loses time to emergency renegotiations rather than shaping long-term plans. Logistics teams face unpredictable service levels.
This is not a failure of procurement. It is a mismatch between an old operating model and a new market reality.
Why index-linked contracts are gaining momentum
Index-linked contracts create a simple agreement. Instead of fixing a price for a year, both parties align to a trusted index and allow the contract to adjust alongside the market at predefined intervals.
And it solves several of today’s biggest problems.
Less renegotiation, more stability
Prices adjust automatically, which removes the pressure, tension and endless cycles of back-and-forth when the market moves.
Fairness becomes measurable, not debatable
Both sides know exactly how adjustments are calculated. There is no guessing, no interpretation and far fewer surprises.
Budgeting becomes grounded in reality
Finance gains a clearer view of how costs will evolve instead of planning around a static number that rarely holds.
Stronger partnershipse
When price no longer dominates every interaction, supplier relationships become more collaborative and less transactional.
Indexation is not about predicting the future. It is about creating a contract that remains relevant no matter what the future holds.
The industry is shifting because volatility is not temporary
Every major supply chain disruption over the last decade has reinforced the same lesson. Volatility is structural, not cyclical. Trade routes shift. Fuel costs move. Capacity tightens and loosens. Surcharges evolve. The freight market is no longer defined by long periods of stability punctuated by rare events. Instability itself has become the baseline.
Procurement leaders are adapting by upgrading the foundation of their contracting model, not just reacting faster within the old one. And index-linked contracts are emerging as one of the clearest paths toward long-term resilience.
The road to indexing
If index-linked contracts make so much sense, why hasn’t the entire industry adopted them already?
For most organisations, the barriers are practical, not philosophical.
Lack of knowledge
Many teams are unsure how to choose the right index, set boundaries or define rules that protect both sides.
Fear of complexity
Without guidance, index-linked structures can feel abstract or risky.
Internal alignment
Finance, procurement and logistics must agree on the structure, impact and monitoring process.
No place to test ideas safely
Until recently, there has been no way to simulate how an index-linked contract would have behaved historically. This made internal buy-in difficult.
These barriers are real, but they are solvable. And once solved, they unlock a much more strategic operating model.
What leading organisations are doing differently
Early adopters are not moving to index-linked contracts overnight. They are building capability step by step.
They start by educating teams. They test index rules against historical market data. They compare different structures to see which aligns best with their risk tolerance. They run scenarios to understand how costs would have evolved. They build internal alignment with evidence, not opinion. They introduce indexation where volatility matters most.
They evolve their procurement strategy instead of trying to weather the next storm using yesterday’s tools.
The most successful organisations blend fixed, indexed and spot models based on lane characteristics, budget sensitivity and risk appetite. Index-linked contracts simply give them an additional lever to use with confidence.
The shift is already underway
Two years ago, indexation was a fringe concept in freight. Today it is one of the most discussed topics among global shippers, CFOs and logistics leaders. Carriers and forwarders are also growing more open to index-aligned agreements as they recognise the long-term value of stability and transparency.
What’s emerging is a new equilibrium. A contract model that reflects how the market really behaves, not how we hope it behaves.
They replace dispute with structure. They replace emergencies with alignment.
They replace cycles of chaos with a clearer, more predictable way to buy and sell freight.
Build smarter contracts. Not bigger spreadsheets.
If you are exploring ways to modernize your freight procurement model, the best next step is understanding how different index rules perform on your own lanes.
You can model, test and learn before adopting anything in the real world.
Learn more about index-linked contracting and explore the simulator.
