Xeneta Says: Market Rocked By Unpredictability But Ocean Freight Prices Climbing
Today, we put out a press release sharing our thoughts on how ocean freight prices have been behaving in Q3 and how we see the ocean containers market moving in the next couple of months. The market is very much unpredictable with the Hanjin effect not lasting, but nonetheless, we see signs in Xeneta data of an increase.
Our CEO, Patrik Berglund notes:
“It was certainly a stand-out quarter,” states Xeneta CEO Patrik Berglund. “Short-term rates on the world’s number one trade route – Far East Asia to North American main ports – sky-rocketed, largely due to Hanjin transforming oversupply to under supply almost overnight. This enabled significant rate hikes, with the market average price for 40’ containers climbing by 47% across Q3, starting at 1240 USD and ending on 1826 USD."
Hanjin effects are not too long lived and we saw that in Q3 short term rates on the number two route – Far East Asia to North Europe – actually fell by 24%.
“That said, this is more of a stabilization, or flattening out, as it should be seen in the context of a longer-term climb. Market averages for 40’ containers hit a low of 662 USD in April and had risen to 1500 USD by the close of September on this route. So, the fall isn’t as serious for carriers as it may seem. However, if it continues that’s another matter. That could bode for a very challenging 2017 for carriers and, therefore, a risky time for shippers who must have predictability in their supply chains.”
The bottom end of the market has seen a HUGE increase. Market low prices from Q1 to beginning of Q4 have seen an incline of 258%. Now, that is pretty big. Have a look at the nice upward trend of the market low prices on the spot market for the past 12 months.
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Figure: Short term contracts | Far East Asia - N. Europe Main | 40 ' Container | Oct 2015 - Oct 2016