Oslo, Norway – Feb 27, 2019 -- An increase in US export activity and European imports have reversed the downward trend in rates for the container shipping industry, according to the latest XSI® Public Indices report from Xeneta. The Oslo headquartered freight rate benchmarking and market intelligence platform today reveals that its index, which utilizes a database of over 85 million contracted freight rates, indicates a month-on-month rise in long-term rates of 2.5%. Although relatively modest, the climb halts a decline that has effectively been ongoing since August 2018.
XSI® is based on constantly updated crowd-sourced rates pooled from hundreds of leading global players, including shippers such as Electrolux, Nestle, Unilever, Tata Steel and Continental. This wealth of exclusive data covers over 160,000 port-to-port pairings, allowing Xeneta to provide unique insight into the constantly evolving world of global freight rates.
February’s report, notes Xeneta CEO Patrik Berglund, makes for interesting reading.
Positive yet unpredictable
“Against the backdrop of mixed financial results for the major carriers - with the ONE alliance all posting negative figures, while Maersk recorded solid profits (albeit with a disappointing growth forecast for 2019) - and on-going concerns about new tariffs in the China-US ‘trade war’, this upwards trend provides somewhat positive news for the container industry,” he explains.
“As ever in this highly complex and unpredictable segment, it’s not straightforward – with some regions less encouraging than others, while Brexit and the 1 March deadline for China-US trade negotiations loom large – but there are notable performances here. That is something that will no doubt be savored. Especially in the US.”
US leads the way
The US export indicator in the XSI® experienced an 8% rise. As such, the declines of the previous year have been reversed, with the benchmark now on par with March 2018 values. Imports remained largely unchanged, down just 0.1%.
The European market is similarly dynamic. Here the import benchmark climbed by 3.9%, translating to a year-on-year rate increase of 7.1% (and a 2,5% rise since the end of 2018). However, Berglund warns that the introduction of Ocean Alliance’s seventh loop service in April (with ten 13-14,000 TEU ships from Evergreen) has the potential to outstrip demand and exert downward rates pressure. The European export indicator rose 0.5%.
According to XSI®, the Far East provides a mixed picture, as Berglund explains:
“The New Year hasn’t got off to the best start here,” he states. “The import performance saw a monthly fall of 2.6%, continuing a long-term decline that has seen the benchmark slump by 14.2% year-on-year. Exports are more stable, down 0.2% but 0.9% above last year. There are complex factors at play here, but it’s impossible not to see the shadow of Presidents Trump and Xi falling over regional developments.”
With an uncertain geopolitical and economic year in store, Berglund says that all parties seeking to get the best value for their assets and cargoes must watch the market closely.
“We can only be certain of further uncertainty,” he concludes. “So, it’s vital that all the stakeholders in the container shipping value chain avail themselves of the latest intelligence to ensure they enter contract negotiations fully informed and ready to get the best deal. No one can afford to ignore what’s going on around them right now.”
To get the full report, please visit: https://www.xeneta.com/xsi-public-indices
Xeneta is the leading ocean freight rate benchmarking and market intelligence platform transforming the shipping and logistics industry. Xeneta’s powerful reporting and analytics platform provides liner-shipping stakeholders the data they need to understand current and historical market behavior – reporting live on market average and low/high movements for both short and long-term contracts. Xeneta’s data is comprised of over 85 million contracted container rates and covers over 160,000 global trade routes. Xeneta is a privately held company with headquarters in Oslo, Norway and regional offices in New York and Hamburg. To learn more, please visit www.xeneta.com.
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