Intelligence platform Xeneta reported that XSI Index showed one of its highest ever increases in January of 5.9% for long-term contract freight rates. Xeneta said this meant the index was up 4.5% year-on-year with “few signs of relief on the horizon”.

While container spot rates have hit record levels in recent driven by an unprecedented surge in demand and severe shortages of equipment in key export hubs, sharp rises in contract rates will have much more sustained impact both on shipper’s costs and the bottom lines of container carriers.

“The high spot rates seen on key trading lanes over the past few months have cascaded down into contracted agreements, putting the squeeze on shippers worldwide,” said Patrik Berglund ceo of Xeneta.

“The reasons behind this are complex, but it’s driven by strong export traffic from China that far outstrips imports, leaving containers marooned in, for example, European ports when they’re desperately needed back in the Far East. Added to that you have extreme congestion at some hubs - Maersk recently reported that between 30-35 ships were waiting to berth at Los Angeles/Long Beach – pushing up waiting times,” he explained.

This combines with the ongoing impact of the Covid-19 pandemic, which essentially caused the situation to arise from the first half of 2020.

“This is an extreme situation and the rate of development is breath-taking. Negotiations are understandably difficult at present, so the latest market intelligence is more important than ever when trying to obtain optimal business value,” Berglund said.

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Long-term container contract rates up 5.9% in Jan: Xeneta