The Rising Influence of Rising Affluence

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Ocean freight rates are down 50% in the last 3 mos...

Long-term ocean freight rates post major decline in June, says expert
https://www.hellenicshippingnews.com/long-term-ocean-freight-rates-post-major-decline-in-june-says-expert/

The long-term ocean freight rates have registered a major decline again, with 50% drop in key pricing benchmark across last three months, according to Xeneta, a leading ocean and air freight rate benchmarking and market analytics platform.

The beleaguered carrier industry took another major hit in June, with the latest data from Xeneta’s Shipping Index (XSI) showing a decline of 9.4% in global long-term shipping rates.

Close on the heels of a 27.5% collapse last month and a 10.3% fall in April, contracted rates have now shed 47.2% of their value in the last three months alone, and 51.7% over the course of 2023, it stated.

Xeneta’s real-time data, crowd-sourced from leading global shippers, shows falls in the prices of valid long-term contracts across all key trading corridors.

Even as the uniform declines have now pushed the XSI to a 23-month low, Xeneta CEO Patrik Berglund says there is a little hope of a turnaround on the industry horizon.

Challenging times
“The fall from the peaks of last year have almost been as dramatic as the rates explosion which gave carriers such a profitable 2022. Those higher rates now appear to be a distant memory, while 2023 is becoming quite challenging,” stated Berglund.

“A fall of almost 50% in contracted prices in just three months on the XSI is highly unusual,” he pointed out.

“Furthermore, with on-going weak demand, continuing macroeconomic and geopolitical uncertainty, and a growing excess of capacity, it’s difficult to see how the industry can turn this current trend around – at least in the short-term,” he added.