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Xeneta Data says Jan 1 – March Q1 2016 Market Average Spot Rates Down 72% for China East to N.Europe & 50% for China East to N.America West Trade Lanes

Katherine Barrios
Mar 03, 2016

March 3, 2016 – Oslo, Norway - Xeneta, the leading price benchmarking and market intelligence big data platform for containerized ocean freight, today announced that its data confirms a 72% drop in the market average price of short-term contracted rates from January 1 – March 1, 2016 for the China East main ports to Northern Europe main ports and a 50% drop in the China East main ports to North America West main ports trading routes.

China East – Northern Europe

On the China East to Northern Europe ports, for a 40’ container, the Xeneta platform showed a continued steady decline in the spot market for the first two months of Q1 2016. The market average price on January 1, 2016 was at $2324 (market low = $1056); February 1, 2016, $1168 (market low = $793); March 1, 2016, $636 (market low = $398). See Figure I. (Figure I. Data source: Xeneta Platform. Short-term rates market average; Jan 1, 2016 – March 1, 2016; China East Main ports – Northern Europe Main Ports)

When comparing Jan 1- March 1, Q1 2015 to Jan 1- March 1, Q1 2016- the market average rate for short-term contracts was $2484 (market low price = $1879) and $1462 (market low price = $879) respectively, indicating a 41% drop in the market average price and a significant 53% drop in the market low price.  See Figure II. (Figure II. Data source: Xeneta Platform. Short-term rates market average and market low; Jan 1, 2015 – March 1, 2016; China East Main ports – Northern Europe Main Ports).

Long-term contracts on the same trade route are not seeing much of an upturn either. The Xeneta data shows market average price for long-term contracts on January 2015 – March 1, 2015 at $1903 and Jan 1 – March 1, 2016 at $1284, a 33% decline.

Further intelligence into future long-term rates provided by the Xeneta platform, clearly confirms the steady hold on the decline nearing the end of H1, with a market average price of $1199 and market low price of $733 in early June.

As new long-term rates were contracted in early 2016, the Xeneta data also shows a sharp decline of about $300 from December 2015 to January 2016, clearly indicating the negotiated long-terms contracts coming in at a much lower price than in late 2015. See Figure III. (Figure III. Data source: Xeneta Platform. 40’ container. Long-term rates market average; Jan 1, 2015 – June 2, 2016; China East Main ports – Northern Europe Main Ports).

 

China East – North America West Ports

On the China East to North America West routes, for a 40’ container, the Xeneta platform showed a continued steady decline in the spot market for the first two months of Q1 2016. The market average price on January 1, 2016 was at $1288 (market low = $967); February 1, 2016, $1234 (market low = $881); March 1, 2016, $634 (market low = $436).

The average prices held pretty steady for the first part of the quarter. They then picked up pre-Chinese New Year (peak in the middle of the graph), as expected with a slight decline during the Chinese New Year and then a big slump post-CNY. Altogether, Xeneta shows a 50% decline in rates from January 1 – March 1, 2016. See Figure IV. (Figure IV. Data source: Xeneta Platform. Short-term rates market average; Jan 1, 2016 – March 1, 2016; China East Main ports – North America West ports).

China East – North America West ports future long-term rates provided by the Xeneta platform, also confirms the steady hold on the decline nearing the end of H1 2016, with the market average price at $1487 and market low at $1187. A tiny dip will happen at the end of April, early May, bringing the market average price in early June to $1432 while the market low will be at around $1205. See Figure V. (Figure V. Data source: Xeneta Platform. 40’ container. Long-term rates market average; Jan 1, 2015 – June 2, 2016; China East Main ports – Los Angeles Area Ports).

 “As many North American-based companies enter their bidding process, it will be interesting to see how the new renegotiated long-term data for the U.S market will impact the trend. We expect to see the same pattern for the Far East Asia – North America West routes as we have seen for the China Main East – Northern Europe routes where the short-term rate decline is later on reflected in the drop in long term rates,” says Patrik Berglund, CEO, Xeneta.

 

Note to Editors:

All figures referred to in the PR can also be seen here: http://www.xeneta.com/blog/q12016-spot-rates-decline-chn

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