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Xeneta sees first crack in container carrier spot rate consensus

With some 450 million data points Xeneta believes that it is well positioned to feel container shipping’s pulse and its latest information has shown a blip in the spot rate’s recent beat.

Nick Savvides, Europe correspondent

July 22, 2024

2 Min Read
los angeles containerized cargo
Photo: Port of Los Angeles

Up to this month the general rate increases (GRI) have been across the board and adhered to by carriers in what was acknowledged by many to be a tight market, with the Red Sea diversions, absorbing excess capacity, while growing port congestion and increased demand all played a roll in the more than 150% surge in spot rates in some major trades.

In what could prove to be the turning point for shippers, the mid-July rate GRI was not backed by all lines, with some offering lower rates, this was considered important because it meant shippers could shop around for better spot rates.

“Early data received prior to 15 July suggested average spot rates would increase on the Far East to US West Coast trade by 2% as carriers looked to push through GRIs. However, new data received from shippers fresh from negotiations shows average spot rates did not increase – in fact they have fallen by $50 per per feu since 14 July,” said a Xeneta briefing note.

The market analytics platform said this “small crack in the dam” could be significant as it demonstrates that “shippers are regaining some negotiating power”.

Xeneta reminds its customers that the cause of this year’s rate spikes is the Red Sea crisis and this is unlikely to be resolved any time soon, however, spot rates in some trades have softened at times, even with the diversions in place.

Related:Container freight rates take a breather

According to Xeneta data Far East to US West and East Coast trades reached a peak on 1 February but then softened considerably by 32% and 33% respectively by 30 April.

European headhaul trades reached a Red Sea crisis peak earlier in mid-January, before retreating in similar fashion to the US services, falling 33% into North Europe and 32% into the Mediterranean by the end of April.

Nevertheless, Xeneta also cautions: “Shippers will be hoping it is a case of history repeating, but there are other storm clouds on the horizon.”

Industrial action in Europe and the US could yet derail container shipping services again, while the prospect of a Trump election victory could raise the spectre of increased tariffs on imports from China and many other parts of the world, which could yet see a surge in demand that will again bolster rates.

Although rates remain high, with average spot since last December up by 382% from the Far East to the US West Coast, by more than 300% to the US East Coast and 457% to North Europe.

Even as Xeneta believes it has seen early signs of a plateau in spot growth, other indices are not showing the same signs that a change is imminent. Drewry’s WCI composite inched upwards by 1%, but spot rates to North Europe rose 3%, while the Shanghai to Los Angeles index declined 3%.

Related:How high will container freight rate spike go?

The SCFI does show a decline into the overall index with a fall of over 132 points over the last week to 3542.44 points.

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About the Author

Nick Savvides

Europe correspondent

Experienced journalist working online, in monthly magazines and daily news coverage. Nick Savvides began his journalistic career working as a freelance from his flat in central London, and has since worked in Athens, while also writing for some major publications including The Observer, The European, Daily Express and Thomson Reuters. 

Most recently Nick joined The Loadstar as the publication’s news editor to develop the profile of the publication, increase its readership and to build a team that will market, sell and report on supply chain issues and container shipping news. 

This was a similar brief to his time at ci-online, the online publication for Containerisation International and Container News. During his time at ci-online Nich developed a team of freelancers and full-time employees increasing its readership substantially. He then moved to International Freighting Weekly, a sister publication, IFW also focused on container shipping, rail and trucking and ports. Both publications were published by Informa. 

Following his spell at Informa Nick joined Reed’s chemical reporting team, ICIS, as the chemical tanker reporter. While at ICIS he also reported on the chemical industry and spent some time on the oil & gas desk. 

Nick has also worked for a time at Lloyd’s Register, which has an energy division, and his role was writing their technical magazine, before again becoming a journalist at The Naval Architect for the Royal Institution of Naval Architects. After eight successful years at RINA, he joined Fairplay, which published a fortnightly magazine and daily news on the website.

Nick's time at Fairplay saw him win the Seahorse Club Journalist of the Year and Feature Writer of the Year 2018 awards.

After Fairplay closed, Nick joined an online US start-up called FreightWaves. 

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