Box contract rates fall

The latest data from the Xeneta Shipping Index reveals long-term contracted rates fell by 1.1% in September. This is the first drop since January and one of only three declines in the past 21 months. However, analysts at Oslo-based Xeneta expect it won’t be the last.

Xeneta CEO Patrik Berglund commented: “Over the past couple of months, clear signs of a market shift have emerged. Spot rates have been dropping across the board and have, on some key corridors, plunged over the course of the last month as lower demand and easing port congestion take effect. The divide between the long- and short-term market is now wider than ever before on many trades, despite record numbers of blank sailings in what would normally be considered a peak season.”

The shoe is finally on the other foot

Berglund said “the shoe is finally on the other foot” when it comes to upcoming contract negotiations for Q4 and beyond.

“The shippers are in the ascendancy while carriers will now be competing to lock-in volumes in the face of lower global demand,” Berglund said.

On the spot markets new data from World Container Index (WCI) published yesterday showed main spot rates to either continue their pace of decline, or even accelerate this week.

Worst hit was the Asia to Mediterranean route which saw spot rates decline $1,200 per feu – or 19% – in just a single week. The one trade lane bucking the trend is on the transatlantic, which was up 4.5%.

“We are in the highly unusual situation that the Atlantic spot rate is now more than double of the rate on the Pacific into the US west coast and almost 30% higher than the Asia-North Europe rate level,” commented Lars Jensen from Vespucci Maritime.

Sam Chambers

Starting out with the Informa Group in 2000 in Hong Kong, Sam Chambers became editor of Maritime Asia magazine as well as East Asia Editor for the world’s oldest newspaper, Lloyd’s List. In 2005 he pursued a freelance career and wrote for a variety of titles including taking on the role of Asia Editor at Seatrade magazine and China correspondent for Supply Chain Asia. His work has also appeared in The Economist, The New York Times, The Sunday Times and The International Herald Tribune.
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