April has delivered a shock to the system for long-term ocean freight rates from the US to the Far East, with significant falls on both East Coast and West Coast routes.
The surprise development, revealed by Oslo-based Xeneta’s weekly market update, shows long-term rates abruptly falling into line with spot rates, after months of gaping chasms between the two.
Putting the falls into context, long-term rates have dropped by USD 250 per FEU from the US East Coast to the Far East since mid-March, while spot rates have been flat. That has brought a gap of USD 350 between the two down to just USD 90 per box at the time of writing. The story is even more pronounced on the opposite coast, where an original divide of USD 600 between the two is now just USD 90 after the latest long-term correction.
In a further sign of weak export fundamentals, US West Coast exports to the Far East are down 2.5% year-on-year for the first two months of 2022, while East Coast exports are down by 19.7%.
Xeneta’s software platform compiles the latest crowd-sourced ocean freight rate data aggregated worldwide to deliver unique market insights. Companies participating in the benchmarking and market analytics platform include names such as ABB, Electrolux, Continental, Unilever, Nestle, L’Oréal, Thyssenkrupp, Volvo Group and John Deere, amongst others.
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 300 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.