“A difficult time to be a shipper,” said Xeneta
Long-term contracted ocean freight rates continued their ascent through June, although not with the ‘dizzying trajectory’ witnessed in recent months, benchmarking and market intelligence platform Xeneta noted.
May’s 9% surge in prices eased back to a 2.3% gain in June. However, the latest figures, detailed in Xeneta’s Long-Term XSI Public Indices, mean rates now stand 39.2% up year-on-year (having risen 37.7% in 2021 alone).
“It can almost be difficult to keep a sense of perspective here,” said Xeneta chief executive Patrik Berglund. “Seen in the context of 2021, a 2.3% gain appears only moderate, but in any other month, in any other year, this is a very strong performance for the carriers.
“We have witnessed truly astronomical increases, due to a very complex combination of factors – from the way coronavirus has both disrupted supply and driven demand, through to unforeseen events, such as the blockage of the Suez Canal. And all the time the carriers have managed routes and capacity to maintain a position of unparalleled strength in negotiations. It is, without doubt, a difficult time to be a shipper.”
Carriers are making moves to increase their fleets, but for the most part, Xeneta commented, these are long-term decisions rather than short-term capacity injections. For example, HMM has just announced it has ordered 12 13,000-TEU vessels for US$1.57Bn, which will take the capacity of the South Korean line past 1M slots, while Hapag-Lloyd has ordered six 23,500-TEU ships, with delivery expected from 2024.
Mr Berglund added “Ports in the US are facing new levels of congestion, causing huge delays in shipments and inventory shortages for retailers. In fact, a recent survey by the National Retail Federation found 97% of members had been impacted by port and shipping delays, while President Biden has announced the creation of a Supply Chain Disruptions Task Force. And looking further afield, let’s not forget Yantian and Shenzhen, which were hit by Covid a couple of weeks ago making it even more difficult to balance supply and demand.”
“Of course, in a connected industry the ripple-effects of disruption are everywhere. In Europe, we hear of vessels from Asia being delayed by up to three weeks, while some carriers are now omitting selected port calls all together, much to the chagrin of shippers. 2M recently announced it would not be stopping at Rotterdam on its Asia-North Europe loops for the next seven weeks, with THE Alliance following suit. Maersk and MSC, meanwhile, are skipping Hamburg on their AE7/Condor loop for another four weeks due to ongoing congestion.
In Europe, imports on the XSI declined for the first time in seven months, with a 4.2% fall. However, the index remains 48.1% up year-on-year. Exports rose 1.9% and stand 18.1% higher than June 2020. The Far East import benchmark climbed by 1.5%, up 27.3% year-on-year, with exports also gaining, edging up a further 2% to 67.8% above this time last year. In the US, imports surged 9.3% in June (36.9% up year-on-year), while exports fell 2%. This is the only index down against June 2020, with a drop of 2.1% (although it has risen 6.6% in 2021 so far).
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