Container shipping rates have peaked
Oslo-based freight benchmarking and market research platform Xeneta believes long-term container traffic rates may have finally peaked, although they are 112% higher than at this time last year and down since July 2019, up a whopping 280%. Monthly growth in the Xeneta Shipping Index (XSI) has slowed, suggesting prices may have peaked, Xeneta said in a container price alert. Xeneta CEO Patrik Berglund said: “July saw an uptick across the board, but there are clear signs that sentiment is shifting as some fundamentals unfold.”
Upward pressure on long-term contracts as spot rates fall across many trade routes. The volume has also decreased. “Therefore, there are indications that we may have peaked and that prices for new contracts are likely to hold rather than suddenly skyrocket as we have become accustomed to lately,” he says. “However, this may offer little consolation to shippers whose markets are constantly being hit and whose prices are currently stabilizing at historically high levels. “
Nevertheless , nothing is certain, ports in the US and Europe are still congested, industrial activity in logistics chains is spreading all over the world, of course the threat of COVID and the impact on economic activity, especially in China The impact is still there: there are many factors at play, so staying up to date when negotiating long-term contracts is essential to gaining a competitive advantage,” Berglund added.
According to Xeneta, some shippers may be in a stronger position to renegotiate contract prices as the spot market weakens and in some cases spot prices are below long-term contract prices. “It will be interesting in the coming months,” he added by Berglund.
Follow us on LinkedIn, Twitter & Facebook