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The global XSI ® jumped by a further 10.1% in June to 421.96 points. The index has now set a new all-time high for four consecutive months. Despite a degree of macro-economic uncertainty clouding the horizon, all major trades saw prices moving up, with some corridors showing significant gains.
Over the longer term, in the last 18 months, the index has recorded just two monthly declines, highlighting how increases have been sustained since the end of 2020. Year-on-year the benchmark has appreciated by 169.8% and is up by 70.7% since the end of 2021.
“Rates developments that would have been front-page news a few years ago are in danger of becoming the norm in a market environment that is historically hot,” he states. “After last month’s colossal rise, we see another hike of 10%, pushing cargo owners to the limits," says Patrik Berglund, CEO of Xeneta.
We have to question if this is sustainable? And the signs are gathering that, well, it might not be.
Berglund points to falling spot rates – that may increasingly tempt shippers away from traditional contracts – in addition to looming industrial action in ports (in Europe and, potentially, the US) that could further damage schedule reliability only just recovering from recent congestion and COVID-induced disruption.
XSI® - US Imports/Exports
US imports on the XSI ® continued to rise in June, jumping by a further 8.6% to 503.85. Whilst the month-on-month rise was less extreme than last month, the index is now up by 203.2% year-on-year and has increased by 112.7% since Dec-21. Growth in US exports was marginal this month, rising by just 0.3% to 134.05.
XSI® - Europe Imports/Exports
European imports on the XSI ® continued to climb, rising by 13.7% to 430.95. This latest increase takes the European component of the index to 163.4% higher than the equivalent period last year and ensures it is up by 58.8% since Dec-21. Exports all rose this month, jumping by an additional 6.2% to 354.71. Year-on-year it is now 148.2% higher and has risen by 84.9% since the end of 2021.
XSI - Far East Imports/Exports
Far East imports on the XSI ® rose by 5.0% this month to 218.36 points. Compared to the same period last year, the benchmark has increased by 62.5% and is up by 33.3% since Dec-21. Growth in exports was stronger this month, rising by 11.6% to 605.81. Year-on-year the index has appreciated by 200.6% and is up by 81.3% since the end of 2021.
We anticipate that shippers will revert to being risk-averse, as much as possible. Top of mind for them will be which trades they will procure on the spot market and which on the contract market and their duration. Shippers will certainly tread carefully as they aim to strike the best possible balance between both markets to make sure their business gets their cargo where it needs to be, when it needs to be there, at the right price.
Note: Xeneta's XSI® is compiled from the very 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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