Box rates slide in April

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 110m data points – all major trading corridors saw month-on-month declines in April, plunging the indices to its lowest level since June 2018.

Oslo-based Xeneta is an ocean freight rate benchmarking and market analytics platform taking data from shippers and freight forwarders.

“This is a real turn of events,” Xeneta CEO Patrik Berglund commented today. “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.”
Berglund cited 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 as some of the reasons for the reversal.

April’s XSI Public Indices show 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 Asia 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 what Xeneta said in release today is a prolonged downward rates trend for the segment to contend with.

US trades have suffered the same fate as their counterparts in April, derailing what was beginning to look like a steady upwards trajectory. After two straight months of increases the export benchmark fell by 2% (although it remains 6.4% higher than year end 2018), while the import index dropped by 3.4%. It is now 3.2% down year-on-year.

“Looking ahead it’s difficult to identify obvious breaks in the clouds,” Berglund stated. “Geopolitics remain stubbornly unpredictable, with on-going uncertainty over US-China relations, while no one – not even the people at the very top – appear to have a clear view of what is happening regarding Brexit and its consequences.”

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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