Long-term ocean freight rates continued their decline in August, marking a year of steady decrease for carriers. The Xeneta Shipping Index (XSI®) data reveals a 7.8% drop in contracted rates this August, adding up to a 62.7% decrease from last year. Routes from the Far East, the busiest globally, experienced a significant 75% year-on-year contract value reduction based on Xeneta's regional sub-index.
Carriers are facing challenging times in the contract market due to weak demand and increasing ship capacity, resulting in widespread long-term rate reductions."
It's important to note that this pattern differs from the spot market, where major trade rates have risen in recent months. As the long-term market usually follows spot market trends, the current advantages for shippers might be temporary.
European Imports & Exports
The XSI® for European Imports fell to 178.7 in August, down by 3.4% from the previous month. Over the past 12 months, this sub-index has fallen by 60.1%.
The XSI® for European exports also fell by just an inch, as it declined by 2.8% from July, bringing it to 188.1 in August. This sub-index has now been halved over the past, falling by 52.4% from August 2022.
US Imports & Exports
US Import as well as exports are increasing being affected by the restrictions that are in place for the Panama Canal transits. And while we begin to see that long term contracts are now ticking up for Far Eastern imports – it’s still not ‘preventing’ the level of all valid contracts to increase m-o-m. The XSI® for US exports stood at 134.5 in August, down by just a single point - and 0.8% from July.
Far East Import & Exports
The XSI® for Far East exports has now fallen by almost 75% since August 2022 – the most of any major XSI® import or export region. At 117.7 the Far East imports XSI fell by another 2.0% in August to 120.2 points, the lowest of all the XSI sub-indices. Since this sub-index peaked exactly one year ago rates have come down by 51.1%.
Get the full XSI® report here.
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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