Xeneta container rates alert: rising long-term rates and port congestion compound cargo owner woes
After another month of high demand, over-stretched infrastructure and difficult negotiations for shippers, long-term contracted ocean freight rates now stand 85.5% higher than at this point last year, according to Xeneta's release. Although August saw rates rise by a relatively modest 2.2% (contrasted to July’s astonishing 28.1% jump) there appears to be little sign of relief on the horizon, with increasing port congestion and relentless demand ahead of the all-important pre-Christmas period. Container ship operators are reaping record-breaking financial rewards as a result.
The latest data comes courtesy of Oslo-based Xeneta, which crowd sources real-time rates from leading shippers to produce the Long-Term XSI® Public Indices, delivering detailed insights of the very latest market movements. Those movements have been following a familiar trajectory throughout the course of 2021, with climbing rates fuelled by demand outpacing supply, supply chain disruption, and the ongoing impact of COVID-19.
August saw OOIL disclose a net profit of USD 2.8bn for the half-year, the best results in the group’s history, while Zim reported a net profit of USD 888m for the second quarter. This figure is higher than the Israeli line’s accumulated total profits for the last five years, showcasing a spectacular turnaround.
The firm, like its peers, is now looking to expand to take advantage of what Berglund calls “red hot” market conditions.
August’s XSI® demonstrates that the heat is on across all major trading corridors, with every region seeing import and export benchmarks edging upwards. In Europe imports rose by 0.5%, while exports climbed 3.4%. Although the pace of growth has slowed compared to recent months, it still leaves the respective benchmarks up 123% and 49.1% year-on-year.
Results in the Far East followed a similar pattern, with imports nudging up a further 0.8% (up 50.5% since August 2020) and exports jumping by 2.5% (a massive 115.5% up year-on-year). The XSI® paints the same picture in the US, where imports increased by an additional 2.1% and exports climbed 0.6% month-on-month. The benchmarks now stand 67.2% and 16.8% up compared to the same time last year.
The Xeneta CEO says landside infrastructure is “simply overwhelmed”, with the congestion tying up vessels , and their sought after containers, in an ever-worsening cycle of delays.
Companies participating in Oslo-based Xeneta’s crowd-sourced ocean and air freight rate benchmarking and market analytics platform include names such as ABB, Electrolux, Continental, Unilever, Nestle, L’Oréal, Thyssenkrupp, Volvo Group and John Deere, amongst others.
About Xeneta
Xeneta is the leading ocean and air freight rate benchmarking and market intelligence platform transforming the shipping and logistics industry. Xeneta’s powerful reporting and analytics platform provides liner-shipping stakeholders the data they need to understand current and historical market behaviour – reporting live on market average and low/high movements for both short and long-term contracts. Xeneta’s data is comprised of over 280 million contracted container and air freight rates and covers over 160,000 global trade routes. Xeneta is a privately held company with headquarters in Oslo, Norway and regional offices in New York and Hamburg.