Has the golden age gone for carriers?

Feb 02 | 2023

Following the highly inflated rates experienced during COVID, Xeneta, the ocean and air freight rate benchmarking and market intelligence platform, is predicting the decline in rates to continue in 2023.

Patrick Berglund, Xeneta

The year ended in somewhat anti-climactic fashion for long-term ocean freight rates, with the latest data from the Xeneta Shipping Index (XSI®) showing a decline of just 0.1%. This follows a steep 5.7% month-on-month fall in November, and with weak spot rates defining the market.  Xeneta warns of far worse for carriers during 2023 which should be good news for customers.

Winds of change
This is now the fourth month in a row that long-term ocean freight rates have dipped, with spot rates falling – and doing so dramatically - since early summer. Despite this negative trend, the XSI® remains 70% up year-on-year, after a strong start to 2022, as port congestion and other disruptions clogged up supply chains, while driving up costs.

The narrative for the beginning of 2023, says Patrik Berglund, Xeneta CEO, looks to be very different.

Clear indications
“At first glance, this month’s data appears to stall the negative curve,” he states, “but this is a little misleading. Firstly, this is due to fewer long-term contracts being signed at this time of year, rather than new agreements coming in with the same rates. When we do see contracts being signed, across all trades, we’re seeing them agreed below the current average for all valid rates.”

He continues: “So, this is really just the quiet before the storm ...

Photo: Patrik Berglund.

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