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Shipping rates still unpredictable

Dec 14, 2016

Xeneta, the leading global benchmarking and market intelligence platform for containerized ocean freight, says that in-depth analysis of Q3 container shipping costs reveals positive trends for the beleaguered container carrier segment. However, the market remains highly complex and unpredictable, with the ‘Hanjin Effect’ already ebbing away. 

 “It was certainly a stand-out quarter,” said Xeneta CEO Patrik Berglund. “Short-term rates on the world’s number one trade route – Far East Asia to North American main ports – sky-rocketed, largely due to Hanjin transforming oversupply to undersupply almost overnight. This enabled significant rate hikes, with the market average price for 40’ containers climbing by 47% across Q3, starting at 1240 USD and ending on 1826 USD.” 

However, Patrik explained that looking at today’s data prices are trending down meaning the Hanjin Effect is history. “There is clearly still an issue of structural overcapacity, albeit more balanced now, and that pushes prices down – with risks for both the carriers and BCOs/shippers. Short-term rates on the number two route – Far East Asia to North Europe – actually fell by 24% in Q3.” 

“That said, this is more of a stabilization, or flattening out, as it should be seen in the context of a longer-term climb,” said Patrik. “Market averages for 40’ containers hit a low of 662 USD in April and had risen to 1500 USD by the close of September on this route. So, the fall isn’t as serious for carriers as it may seem. However, if it continues that’s another matter. That could bode for a very challenging 2017 for carriers and, therefore, a risky time for shippers who must have predictability in their supply chains.” 

Patrik said that it’s “too early” to accurately predict the market for 2017 though, citing the unpredictability of a segment that changes almost daily.  

 

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