We are clearly at a turning point in the market. The shifting market leads many shippers to ask questions about their positioning and how best to use the new situation. Depending on their risk level shippers, some shippers might want to wait and see before signing a new long-term contract instead of putting all their volumes on the spot market.
The next few months will also be exciting for shipper-carrier relationships as carriers currently have the potential to repair some of the damage from the past years.
With these recent events impacting the ocean freight market and, potentially, future negotiations with your suppliers, learn what Xeneta experts have to say about the future of the ocean and air freight market.
May saw the highest monthly increase in long-term contracted ocean freight rates since Oslo-based Xeneta started tracking these shipments, as the cost of locking in container shipments soared by 30.1%. The unprecedented hike, revealed in the latest Xeneta Shipping Index (XSI) public indices for the contract market, means that long-term rates are now 150.6% up year-on-year. In 2022 alone, costs have climbed by 55%.
“This is a staggering development,” commented Xeneta CEO Patrik Berglund. “Just last month we were looking at an 11% rise and questioning how such continued gains were possible. Now we see a monthly increase of almost a third blowing the previous XSI records out of the water.
“The breath-taking gains reflect the sharp increase of the average of all valid long-term contracts, as older contracts, with lower rates, expire and are replaced by newer agreements with much higher rates. It’s certainly a challenging time to be a shipper.”
While the split between long-term contracted and spot cargoes has traditionally been 50:50, during the first couple of years of the pandemic, the volume of spot cargoes edged ahead, this is expected to reverse in 2022, with Xeneta’s chief analyst Peter Sand telling Splash he is forecasting a 55:45 split in contracted cargo’s favor.
Full story is available here.
Why Picking the Right Carrier is Crucial | FreightWaves
Some carriers are looking to shift their risks onto the shipper, bringing incoterms back into the discussion, or perhaps more stringent demurrage and detention conditions, or tightening capacity commitments and reducing a shipper’s flexibility.
Record low carrier-shipper relationships and trust will complicate any re-negotiations but be sure that carriers will want something in return. Check out this recent interview with Xeneta Co-founder and CEO, Patrik Berglund on FreightWaves TV, where he explains how data plays an essential role in picking the right carrier during a volatile market.
Full interview available on FWTV.
Transit Times Reveal The True State of Reliability, Not Queueing Ships | Loadstar
Global schedule reliability has probably reached rock-bottom, with only room for improvement, according to Xeneta’s latest state-of-the-market webinar.
Xeneta market analyst Emily Stausboll said: “There are still some trades where there is potential for schedules to worsen, such as to the US east coast, but on a global level, reliability is likely to improve, barring further disruption.”
Peter Sand, Xeneta’s chief analyst, added that cargo owners should be prepared to pay for greater reliability, explaining: “If you believe the time is of the essence, you may be prepared to pay a little bit more, not only in priority shipment fees but also in terms of engaging with some of the carriers which are door-to-door logistics providers with a wider offering.”
Read the full update here.
Why Is Congestion Still An Issue, If Demand Is Falling? | Xeneta Newsroom
Watch the latest episode of our weekly LinkedIn LIVE series where we deliver timely shipping market insights.
This 10-minute expert commentary from Xeneta's Chief Analyst and market expert, Peter Sand will provide you with specific market updates so that you can anticipate any upcoming changes or disruptions and react faster to the ever-changing market conditions.
Watch full video here.
Container Shipping's Biggest Challenges & Importance of Shipper-Carrier Relationship | Xeneta at TPM 2022
In case you missed it, a couple of months ago, Patrik Berglund, Xeneta CEO, was a speaker at this year's TPM22 event in Long Beach, the largest container shipping conference.
Check out the TPM interview with him where he discusses with the Journal of Commerce's Associate Director, Alessandra Barrett, about container shipping industry's biggest challenges and the importance of the shipper-carrier relationship."
Want To Learn More?
With a possible global recession on the brink, shipping and supply chains will be put under further pressure.
Schedule a personalized demo of the Xeneta platform and learn how on-demand freight rate and market insight data will help you navigate through the current climate and identify potential savings in your freight spend.