Tuesday, October 19, 2021
HomeBreaking NewsShipping rates in Jan up 5.9% from Dec, among historic highs—Xeneta

Shipping rates in Jan up 5.9% from Dec, among historic highs—Xeneta

  • Rates currently going “through the roof,” with congested ports, a lack of equipment and lopsided demand putting carriers “in a position of unparalleled strength”
  • High rates driven by strong export traffic from China that far outstrips imports, leaving containers marooned in Western ports
  • In the Far East, exports climbed by an impressive 15.1% month-on-month and 17.3% year-on-year
  • Maersk recently reported that between 30 and 35 ships were waiting to berth at Los Angeles/Long Beach in the US

Global shipping rates showed one of the highest ever monthly rate increases in January 2021, jumping 5.9% from the previous month and up 4.5% year-on-year, with few signs of relief on the horizon, according to Xeneta’s latest XSI Public Indices report.

The latest rates are currently going “through the roof, with congested ports, a lack of equipment and lop-sided demand putting container shipping companies in a position of unparalleled strength during negotiations,” said Xeneta, an air and ocean freight rate benchmarking and market intelligence platform.

Xeneta CEO Patrik Berglund said the unprecedented demand for containers is driving up prices to new heights. “The high spot rates seen on key trading lanes over the past few months have cascaded down into contracted agreements, putting the squeeze on shippers worldwide.”

He said the high rates are driven by strong export traffic from China that far outstrips imports, leaving containers marooned in, for example, European ports when they’re desperately needed back in the Far East.

In addition, extreme congestion at some hubs is pushing up waiting times, serving to further reduce already strained capacity and exacerbating the imbalance in supply and demand. Xeneta said shipping giant Maersk recently reported that between 30 and 35 ships were waiting to berth at Los Angeles/Long Beach in the US.

Another driver of spikes in freight rates is the ongoing impact of COVID-19, with disruptions in supply chains heightened by increased online sales and outbreaks among essential workers. Again, Los Angeles/Long Beach has been impacted here, only heightening the sense of turmoil.

“This is an extreme situation and the rate of development is breath-taking,” said Berglund.

The turbulence is evident in Xeneta’s latest XSI Public Indices round-up of regional imports and exports on key corridors.

  • In Europe, imports notched up their highest ever monthly increase, surging by 19.3% from a month ago—mostly driven by flows from Asian origins—leaving the benchmark up 12.5% year-on-year. However, the supply-demand imbalance is clearly on the export side, with a 1.9% fall, down 1.6% compared to January 2020.
  • In the Far East the picture was reversed, with exports climbing by an impressive 15.1%, leaving the index at an all-time high—up 17.3% year-on-year, while the import figure fell 4.6%, down 11.1% against this time last year.
  • The US import benchmark showed less volatility overall, with a rise of 0.7%, moving up 0.5% year-on-year. However, exports fell by their second largest ever recorded dip, with the figure dropping 6.2%. This moves the index down an eye-catching 17.7% year-on-year.

Looking ahead Berglund said the outlook for the future remains unclear, but that further change can be expected. “We know that Beijing is keen to stabilize rates and protect exports. So, if we begin to see importers abandoning exports from Asia due to extortionate rates, then expect the authorities to step in.”

XSI effectively takes the temperature of the long-term contracted market, capturing the latest rates from leading shippers. Companies participating in the ocean and air freight rate benchmarking and market analytics platform include ABB, Electrolux, Continental, Unilever, Lenovo, Nestle, L’Oréal, Thyssenkrupp, Volvo Group and John Deere, among others.

Image by Jason Goh from Pixabay

 

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