Global contracted rates fell by 0.6% this month - Xeneta

The latest data from the Xeneta Shipping Index (XSI) reveals global contracted rates fell by only 0.6% this month, following on from September’s 1.1% decline (the first falls since January 2022). That said, the signs of softening fundamentals are, according to Xeneta, “there for all to see.”
 
“Spot rates have plummeted since the summer across key trading corridors, such as the Far East to US West Coast, and long-term rates usually play catch up after a few months. In addition, you have zero sign of peak volumes hitting the waves, as many shippers already have high inventories and are anticipating lower seasonal demand due to the challenging macroeconomic picture. Added to weaker consumer confidence, you also have higher fleet capacity. So, in this context, a mere 0.6% fall looks almost like a ‘win’ for the carriers.”
 
Xeneta’s data shows significant drops in long-term contracted rates now emerging on selected, major routes, such as from the Far East into Europe. Although not yet on the scale of the spot collapse, newly contracted long-term rates from the Far East to the Mediterranean have dropped away by 30% since the end of September, also falling by 12.4% into Northern European ports. This has contributed to all active contracts for the two lanes falling by 13.5% and 8.3%, respectively, this month.
 
Xeneta’s CEO also points out that this month saw the first demolition of a containership with a capacity of more than 1 000 TEU since March 2021.
 
European imports fared the worst in October’s analysis, with their largest recorded month-on-month drop of 8.3%, but this benchmark remains an impressive 63.7% up compared to January 2022. There was no change on regional export rates, which remain just shy of their August peak.
 
Contracted rates out of the Far East saw a 2.2% fall this month, with volumes down 1.6% across the first eight months of the year. Despite the latest dip, this export index stands a huge 89.4% up since the start of 2022. The import index edged up 0.2% month-on-month, now up 35.5% against January this year, and 60% up year-on-year.
 
The direction of the US indices bucked the overall trend this month, with both import and export benchmarks making impressive gains. The import XSI registered a 5.2% increase in October, contrasting sharply with huge spot rate falls, while the export index climbed by an even larger 8.3% (up 60% since last year).
 
Xeneta’s unique 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.