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Xeneta Shipping Index (XSI®) Contract Market: September 2021

The Xeneta Shipping Index September 2021 for the ocean freight contract market increases over 90% YoY. Shippers feel pain and carriers pile in cash.

Welcome to the September 2021 edition of the Xeneta Shipping Index (XSI®) report for the long-term contract container market. This month's report reveals yet another monthly hike in long-term ocean freight rates, with global container prices climbing by 3.2%. The development follows a 2.2% increase in August and an unprecedented 28.1% jump in July, leaving rates now standing 91.5% up year-on-year. There is little evidence to suggest a weakening of market fundamentals – meaning there could be more pain in store for shippers, with colossal profits looming for carriers.

This year has seen a unique convergence of COVID-19 disruption, port congestion, strong demand and maxed-out capacity, and that has stoked the flames of record-breaking rates. The global supply chain is under immense pressure and desperate shippers have no choice but to pay up to secure deliveries, or at least try to, ahead of key trading periods such as Christmas. It’s a crazy market out there.


Will a broken market bring both sides to the table?

Carriers are calling the tune, with major newbuild capacity injections still some way off (around 400 container vessels have been ordered so far in 2021), while a 7-8% growth in global container volume is anticipated.

With such a lop-sided playing field carriers are aiming to secure elevated rates by locking customers into more long-term contracts (now 60% of Maersk’s bookings) and hedge future revenue. Some leading players are even offering multi-year deals, with the benefits of additional volume options, or stable, guaranteed shipments. 

“Shippers are treading carefully in this regard,” says Berglund, “but there is some appetite for longer-term commitment – raising the question of whether both parties might look beyond the traditional tender?”

 XSI® - US Imports / Exports 

US imports on the XSI ® increased by just 0.6% in September to 200.83. Although the pace of growth has slowed in recent months, the index is still up by 67.3% compared to last year. It has also appreciated by 64.4% since Dec-20. Exports also grew by 0.6% month-on-month to 106.40 points.

XSI® - Europe Imports / Exports 

European imports on the XSI® rose by 3.9% in September to 254.95. Representing another all-time for the index, the benchmark has appreciated by 132.5% since Sep-20. Compared to the end of last year the index is also up by 129.2%. Exports also increased this month, rising by 1.3% to 173.68 points.

XSI® - Far East Imports / Exports 

Far East imports on the XSI ® fell by 0.7% in Sep-21 to 144.41. This represents the first month-on-month fall since Mar-21 and takes the benchmark to 49.8% higher than the equivalent period last year. Developments on the exports index were more favorable, having increased by 5.1% to 269.72 points.

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