Xeneta’s global XSI® for the contract market dropped by 5.7% in November. This is the third month in a row rates have dropped, but the largest month-on-month decline recorded since the launch of the XSI® in 2019. For many carriers, the fall in the XSI® will trigger the fall in their average rates and will bring an end to record-breaking quarters.
Q3 2022 results for several large carriers showed their average rate increased from Q2, despite the collapse in the spot market, but with long-term rates now firmly coming down, carriers will no longer be able to hide falling volumes behind higher rates. Read more in the latest Xeneta Shipping Index (XSI®) report.
“A drop in long-term rates is no surprise, but the scale of this demonstrates the challenges facing the industry at present,” states Patrik Berglund, Xeneta CEO.
Berglund says that depressed consumer demand in the face of the cost of living crisis is leaving carriers in a position where they’re now “fighting for volume” after over two years of strong demand, supply chain congestion and under-capacity.
“We’ve already seen how spot rates have collapsed since summer, and after a few months of very slender long-term rates drops, we’re now witnessing a ‘catch-up’ as existing agreements expire and new contracts come into force,” he adds.
XSI® - US Imports/Exports
The US import index fell to 538.18 in November, down by 8.9% from October. Volumes on the Transpacific continue to be muted. However, spot rates on the Transpacific seem to have stabilized at a low level, with some carriers reporting that some of their services are now below breakeven levels.
The index for US exports fell by 5.3% in November to 155.09 points. This still marks a 25.4% increase since the start of the year and up by 38.6% from November 2021.
XSI® - Europe Imports/Exports
The XSI® for European imports fell for the third month in a row, though at a slower pace than in October. The index now stands at 396.13 points, 3.5% lower than in October. Compared to November 2021, the index is up by 47.9%.
The sub-index for European exports saw a smaller drop, down by 1.1% from October, leaving it at 384.4 points in November. Compared to last year, the index is up by 83.0%.
XSI - Far East Imports/Exports
The Far East import index fell by 6.2% in November to 209.69 points. Now up by 30.9% from November 2021, this is the XSI® sub-index with the lowest year-on-year growth.
The Far East export index fell to 561.24 points in November, its first time below 600 since May. This was an 8.5% fall compared to October, the biggest month-on-month drop on record and the fourth month in a row with a fall.
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.