Higher long-term container rates to help carriers to huge profits in 2022 - Xeneta
Long-term ocean freight rates climbed yet again in August, edging up 4.1% month-on-month to stand 121.2% higher than this time last year. The latest global data, crowd-sourced by Oslo-based Xeneta for its Xeneta Shipping Index (XSI®), demonstrates that, despite softening spot rates, uneven demand and ongoing supply chain issues, the world’s leading carriers remain on course for another bumper year of profits.
Xeneta’s benchmarking and market analytics platform, which aggregates data from leading global shippers and freight forwarders, shows that new long-term contracted rates are actually starting to drop on key trading corridors, following on the heels of declining spot prices. However, due to the fact they’re replacing expiring agreements with considerably lower rates, the average paid by all shippers is still climbing.
“There’s no doubt the major carriers have had it their way in negotiations for some time,” notes Patrik Berglund, Xeneta CEO. “The spectacular results they saw in 2021 will no doubt be repeated, and even bettered, this year, as seen by the huge profits that defined many Q2 financial reports. But there is a sense that change is in the air.”
He continues: “Volumes are dropping and, as expected, long-term rates are beginning to follow the trend set by the spot market. When you add in an uncertain macroeconomic outlook, continuing supply chain issues – such as the industrial action we’ve seen occurring, or threatened, in major ports in Germany, UK, and the US – and disruption in China due to the zero-COVID policy, it’s an unpleasant cocktail for the industry to swallow.
For the time being, however, the latest container rates intelligence follows a development path well-trodden over the last couple of years. According to the XSI®, all major indicators across all key routes are still resolutely pointing upwards.
In Europe, the import benchmark grew by 2% month-on-month, an 82.6% increase against August 2021. Exports were even stronger, climbing 7.3% from July. Exports out of the far East showed a 2.7% rise across August and have now rocketed by 90% this year alone. The curve in imports has not been so precipitous in 2022 (climbing by 40.4% this calendar year), but the last month saw a strong, 4.3% rates rise.
As far as August was concerned, both import and export indicators climbed for the region, with imports up 6% (a huge 183.2% year-on-year increase) and exports rising 7.1% (42.5% higher than August 2021).
Oslo-based Xeneta’s software platform compiles the latest ocean, and air freight rate data aggregated worldwide to deliver powerful market insights. Participating companies include 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 analytics platform transforming the shipping and supply chain industry. Xeneta’s powerful reporting and analytics platform provides liner-shipping and air cargo stakeholders the data they need to understand current and historical market behavior – 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 shipping 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 Jersey, USA and Hamburg, Germany.
