Containerized Freight Rates on the Path of Recovery?

Image Courtesy: World Shipping Council

The container shipping market is staging a small recovery, with short-term rates for the main Far East Asian to North European ports rising, suggesting long-term costs could soon follow suit, according to Oslo-based benchmarking and market intelligence platform for containerized ocean freight Xeneta.

“There were some declines in average prices for shipping 40′ containers through May but generally speaking the market is starting to look a little better for the carriers as we enter Q3,” Patrick Berglund, Xeneta CEO, said.

According to Xeneta, short term rates for the main Far East Asian to North European ports have now increased by 99 percent since their March lows. The average rate as of 31 May was USD 1,102.

“Looking into our data for future long-term contracted rates we can see that they will rise to USD 1,014 in early July, and hold steady at USD 1,015 through to September. This is a rise of 7% from the end of May,” Berglund said. 

The pattern on the world’s number one route suggests a fairly clear development curve, according to Xeneta.

“Based on the wealth of historical data we have on the Xeneta platform, we can see that short-term rates are always the first to go up or down, with long-term rates following their lead. This raises an interesting question for shippers – should they take advantage of long-term agreements now and lock in rates while they’re still low?” Berglund said.

“On the face of it, you’d say ‘yes’. But there are potentially serious risks involved. When container prices now begin to rise, those that have been booked in at a lower price may be shunted down the pecking order in favour of those that have agreed the new, higher rates,” he added.

This phenomenon of ‘short shipping’ is nothing new in the container market, with the carriers – who have been experiencing very difficult times – obviously keen to maximize the returns on each box.

“The danger of having cargo left at the quayside, and therefore losing sales/breaking the supply chain, is a ‘worst nightmare’ scenario for a retailer, or any company that ships in large volumes,” Xeneta said.

In addition, the fluctuations in the market and the risks they pose to both container carriers and their customers are adding to the instability of the sector that is currently defined by a fight for survival, according to this market intelligence platform.

Finally, Berglund believes that big data software platforms delivering data to shippers, freight forwarders and carriers can be used to turn container shipping into a commodity.

Share this article

Follow World Maritime News

In Depth>

Events>

<< Mar 2017 >>
MTWTFSS
27 28 1 2 3 4 5
6 7 8 9 10 11 12
13 14 15 16 17 18 19
20 21 22 23 24 25 26
27 28 29 30 31 1 2

INMEX Vietnam 2017

The event is an exceptional meeting point for the global maritime community in Vietnam, a region where the industry remains buoyant and strong…

read more >

14th Annual Green Ship Technology

4 concurrent streams focussing on innovation in ship design, energy management, emissions reduction & discharges to sea
Cargo owners’ response to increased pressure for a sustainable logistics chain…

read more >

14th International Maritime Exhibition & Conference

14th EXPOSHIPPING EXPOMARITT Istanbul International Maritime Exhibition will be organized with the support of Turkish Ministry of Economy…

read more >

Ferries Asia Summit

Propelling Regional Waterway Connectivity & Fleet-wide Operational Excellence

Ferry travel is in the limelight. The potential for driving tourism growth is immense – and for archipelago nations battling with urban congestion, ferry services pose a clean, efficient alternative in everyday public transport. But high-profile ferry accidents have brought ever greater attention to safety regulations for Asia’s maritime travel industry.

Amid these circumstances, how can vessel operators cope with ever-tightening safety requirements, while making the right decisions at the right time to capture rising demand? What are the smartest ways to improve service reliability and fleet quality, that maximize operating and capital spend? What are the industry’s best-practices for sustainable growth, and how can they be achieved?

Play your part! Join us at the Ferries Asia Summit 2017 to push forward the regional debate on making Asia’s ferry industry more progressive, safe, and commercially sustainable. Bringing together fast-ferry, RO-RO and ROPAX vessel owners along with international and domestic maritime regulators, classification agencies, shipbuilders and naval architects, this event connects the entire value chain for a meaningful holistic debate on ferry operations excellence in Asia.

WHAT’S ON THE AGENDA THIS YEAR?

Comprehensive debates on addressing the complexity of ferry safety in Asia: Is vessel age truly the greatest concern? How significant are other factors, and how can they be addressed?

Pathways to change through greater public-private collaboration

Contrasting viewpoints on the most effective ways to enhance operational stability & passenger management

Cost-efficient O&M strategies to extend vessel life & tips for stakeholder management to avoid purchasing mistakes

Integrating ferry business with tourism opportunities through strategic partnerships

Exciting formats including speed networking, panel discussions & a high-intensity fast-pitch ‘Shark Tank’!

For more information, click here to download the brochure.
If you would like to attend the event, register here before 3rd February to save USD 400.
Alternatively, email us at enquiry@iqpc.com.sg 
for any enquiries regarding the event.

More info

read more >