Home » Breaking News, Maritime » Container rates fall for all major corridors in April—Xeneta

The latest XSI® Public Indices shows that container shipping rates declined by 4.2% in April to 104.45 points after two months of steady increases, said Xeneta in its latest report.

Xeneta said the April fall in long-term contracted rates for containership operators marks the single largest monthly decline in percentage terms since the inception of the index, and takes the benchmark to its lowest level since June 2018. Year-on-year, the global XSI® is down 1.3% but it has fallen 3.6% since the end of 2018.

According to the report’s crowd-sourced data—covering over 160,000 port-to-port pairings, with 110 million data points—all major trading corridors saw month-on-month declines, plunging the indices to its lowest level since June last year.

“This is a real turn of events,” noted Xeneta CEO Patrik Berglund. “The past two months have seen the industry halt a long-term rates decline and achieve some much needed respite, with rates rises of 2.5% in February and a more modest 0.5% in March.

“In that context a 4.2% fall comes as a slight shock to the system and will have many in the industry reassessing the short- to medium-term forecasts for their businesses.”

Berglund said the reasons for the decline included overcapacity on the European trades, with Ocean Alliance increasing activity and new slots for a standalone HMM service, and continued fallout from the U.S.-China trade war.

“Further pressure has been applied on the trade due to the Ocean Alliance increasing capacity on a number of loops, as well as additional slots being added to a standalone HMM service. This extra capacity could lead to further rate pressure, which doesn’t bode well for carriers concerned about recovering impending costs associated with new IMO regulations,” explained the report.

“In short, suppliers have benefited from a market in flux due to trade wars, IMO, socio-economical factors, like Brexit, and now the situation is turning. As always, uncertain waters may lie ahead for the contract market,” said Berglund.

April’s XSI® Public Indices showed rates figures firmly in the red. European imports fell by 4.8% (2.3% down on year-end 2018), while exports declined by 1.9% (2.4% down for the year).

For the Far East the import benchmark dropped by 2.1% in April, thereby offsetting the increase reported in the previous month, while exports slumped 3.6%. The export figure has now fallen by 4.5% since the start of the year and 9.7% between July 2018 and April 2019, indicating a prolonged downward rates trend for the segment to contend with.

For the U.S. trades, after two straight months of increases, the export benchmark fell by 2% in April (although it remains 6.4% higher than year-end 2018), while the import index dropped by 3.4%. It is now 3.2% down year-on-year.

“Looking ahead it’s difficult to identify obvious breaks in the clouds,” Berglund stated. “Geopolitics remain stubbornly unpredictable, with on-going uncertainty over US-China relations, while no one—not even the people at the very top—appear to have a clear view of what is happening regarding Brexit and its consequences.”

Concluding, the Xeneta CEO noted: “The only advice I can really offer stakeholders on both the supply and demand side is to stay tuned.”

Oslo-based Xeneta, an ocean freight rate benchmarking and market analytics platform, produces the monthly XSI® with data gathered from the world’s foremost shippers and freight forwarders.

Photo: PublicDomainPictures

No comments yet... Be the first to leave a reply!

Leave a Reply

Your email address will not be published. Required fields are marked *

seventeen − sixteen =

Close
Please support the site
By clicking any of these buttons you help our site to get better
Copy Protected by Chetan's WP-Copyprotect.