Container ship rates for June fell by 1.8% according to the latest XSI Public Indices report published by Oslo-based Xeneta
The drop in rates follows on from a 1.2% decline in May and although levels remain historically high, the carrier segment has now seen a 0.2% decline following four consecutive months of increases through to February 2020.
XSI, which provides market intelligence based on real-time crowd-sourced shipping data, said the import benchmark for Europe fell 1.9% – a fourth consecutive month of decline. The export figure fared slightly better, slipping just 0.3% in value.
The US indices suffered sharper falls, with imports dropping by 4.6% while exports declined 3.5% across June. Both long-term contracted rate benchmarks have now moved downwards over the course of 2020, with imports falling by 2.9% (although remaining high against historic levels) while exports are down 3.3% since the end of 2019.
Rates on the Far East corridors fared better with the import figure climbing by 1%. But exports fell 0.4%. Nevertheless, both benchmarks have climbed on a year-to-date basis, with imports surging by 7% and exports rallying by 1.3%.
Last month the company said that while the sector’s worst fears over a potential freefall in rates have yet to be realised, uncertainty continues to plague the sector. Xeneta chief executive Patrik Berglund said the efforts of owners and operators to balance supply and demand by removing tonneage or adjusting routes has helped to mitigate a collapse. He said “What will be key now is can carriers resist the temptation of releasing capacity back into the market in an attempt to win market share? The capacity is there ready to be deployed, but do that too soon, and too rapidly, and the rates could collapse.”
In June, the IMF slashed its forecast for global growth by 4.9% for 2020, the greatest drop since the end of the Second World War with the Eurozone block facing a hit of over 10%. But Mr Berglund insisted that the complexity of the sector means the situation can change. “Spot rates on the Far East-US West Coast route have been climbing since April, national governments are still working to support their home carriers, and new investment – such as the launch of a 12-day China-Los Angeles service from Zim Line – show the segment is certainly capable of positive development, despite the wider macro-economic picture.
“Each month seems to reveal a new twist in the plot of short- and long-term freight rate development. Long-term values may be a concern right now, but the short-term market is providing a real silver lining for carriers. If they can get the volumes back while protecting the rates then all of a sudden smiles may well return to industry faces. We shall see.”
Get the latest information and viewpoints on marine fuels, lubricants and coatings during Riviera Maritime Media’s series of webinar weeks on key technical subjects in shipping