A year of historically high long-term contracted container rates is being pushed to new heights, says Xeneta, with a further 9% surge in prices across May
According to the latest market intelligence from Xeneta’s Long-Term XSI Public Indices, which crowd sources rates from leading shippers and freight forwarders, the global benchmark now stands 34.5% higher than it did at the start of 2021, some 33.5% up year-on-year. All major trade corridors have seen rates growth across the first five months, with Far East export and European imports leading the way, with both up by over 50%.
Xeneta chief executive Patrik Berglund said “Every month we see a new set of results from the carriers demonstrating their strength. This time it’s Zim, which has managed to almost double its year-on-year TEU revenues… turning a loss of US$12M for the quarter in 2020 into a US$590M profit this year. A truly remarkable performance.”
He continued “After years of fluctuating fortunes, the carriers are determined to seize the current opportunity, manoeuvring to exploit huge consumer demand and increased online retail with new strategic moves.”
Commenting on shippers, Mr Berglund said “A lack of equipment and the ongoing ramifications of coronavirus, added to unforeseen factors such as the blocking of the Suez Canal, have squeezed supply chains, pushing capacity to bursting point. This leaves stressed shippers facing increasingly one-sided negotiations and even when contracts are signed, the potential of rolled cargos and broken agreements as operators take advantage of massively lucrative spot rates.
“With carriers blanking sailings to manage capacity, added to continuing high demand and reduced retail inventories, it’s difficult to see the prospect of any immediate rates relief on the horizon. Of course, as we know only too well after a rollercoaster year, things can change overnight, so it pays to keep an eye on the latest intelligence – and that relates to everyone – in the bid to achieve optimal value in future negotiations.”
In Europe, the import benchmark rose for the sixth consecutive month, by 3.9%, now standing 51.6% up year-on-year, and 53.5% up since the beginning of 2021. European exports, meanwhile, jumped by 8.6%, equating to a 15.5% hike against the same period last year. The Far East experienced substantial monthly gains across both imports and exports, with the former jumping 13.8% and the latter 12.2%. Both figures now overshadow those of May 2020, with imports 26.7% up and exports a huge 63.7% higher year-on-year (56.4% up since the end of 2020).
“As nations gradually emerge from the worst of the pandemic, and more equipment and capacity is introduced, it’s possible we’ll see some relaxation in rates… but in the short-term, the carriers appear to be holding all the cards,” said Mr Berglund.
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