The container shipping industry faced a challenging time in April, with global long-term ocean freight rates plummeting by 10.6%. The reason behind this decline was the introduction of numerous new contracts reflecting low market demand and high capacity. As a result, all regional trade lanes observed month-on-month declines.
The Xeneta's Shipping Index (XSI®) reports that container rates have decreased by 13.6% in 2023 so far. Xeneta CEO Patrik Berglund commented that this marks the eighth consecutive month of falls and is undoubtedly one of the most remarkable with prices dipping over 10%. The March dip of just 0.5% was misleading, as new contracts at significantly lower prices were waiting to take effect in April, and now, the dramatic impact of that is evident.
Global XSI®
Global XSI® fell 10.6% MoM in April to 309.1 points, but it's still 5.0% higher YoY. New contracts at the beginning of Q2 caused larger declines in the XSI® and its sub-indices. The global XSI® declined 13.6% since the beginning of the year, putting pressure on carriers' margins.
XSI® Europe
European imports had a record-breaking MoM decline of 19.5% in April to 261.1 points. All sub-trades into Europe experienced MoM declines, except long-term container rates between Southern Africa and North Europe. European exports witnessed a double-digit decline of 15.8% in April to 296.1 points. The total imports into Europe decreased 9.1% in the first two months of the year, and the pace of decline in exports accelerated.
XSI® Far East
Far East exports declined 10% MoM in April to 366.6 points, the lowest level since February 2022. Far East imports declined 15.5% MoM in April to 159.6 points, the lowest level since October 2021. Although exports out of the Far East are still facing low demand, carriers have been able to improve their filling factor slightly due to a reduction in capacity.
XSI® US
US imports had the smallest MoM decline of 1.5% among XSI® sub-indices to 451.5 points. Spot rates increased in mid-April, and carriers implemented General Rate Increases (GRIs) to pressure shippers. US exports experienced the biggest decline among all sub-indices, dropping 18.9% to 145.3 points.
Note: Xeneta's XSI® is compiled from the latest crowd-sourced ocean freight rate data aggregated worldwide. Companies participating in the benchmarking and market analytics platform include names such as ABB, Electrolux, Continental, Unilever, Nestle, L'Oréal, Thyssenkrupp, Volvo Group and John Deere, amongst others.
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