OSLO : After two months of steady increases in long-term contracted rates for containership operators, the latest XSI Public Indices report from Xeneta shows a reversal of fortunes, with rates falling by 4.2%.
According to the report’s crowd-sourced data - covering over 160,000 port-to-port pairings, with 110 million data points – all major trading corridors saw month-on-month declines, plunging the indices to its lowest level since June 2018.
However, unfortunately for those on the asset owner and operator side, notes Xeneta CEO Patrik Berglund, that map is currently showing somewhat challenging terrain.
“This is a turn of events,” Berglund comments. “The past two months have seen the industry halt a long-term rates decline and achieve some much needed respite, with rates rises of 2.5% in February and a more modest 0.5% in March. In that context a 4.2% fall comes as a slight shock to the system and will have many in the industry reassessing the short- to medium-term forecasts for their businesses.
“The reasons for the decline are complex, but certainly overcapacity on the European trades (with Ocean Alliance increasing activity and new slots for a standalone HMM service) and continued fall out from the US-China trade war (where shippers initially front loaded cargoes to avoid additional cost) have added to longer term structural issues and political/economic uncertainty.
“In short, suppliers have benefited from a market in flux due to trade wars, IMO, socio-economical factors, like Brexit, and now the situation is turning. As always, uncertain waters may lie ahead for the contract market.”
April’s XSI Public Indices shows rates figures firmly in the red. European imports fell by 4.8% (2.3% down on year end 2018), while exports declined by 1.9% (2.4% down for the year).
For the Far East the import benchmark dropped by 2.1% while exports slumped 3.6%. The export figure has now fallen by 4.5% since the start of the year and 9.7% between July 2018 and April 2019, indicating a prolonged downward rates trend for the segment to contend with.
