Xeneta Shipping Index (XSI®) Contract Market: August 2022

The global XSI® rose again in August to 453.2 points, yet another month in which the XSI® has set a new record. This was up by 4.1% from July 2022 and 121.2% from August 2021.

Despite softening spot rates, uneven demand and ongoing supply chain issues, the world’s leading carriers remain on course for another bumper year of profits. New long-term contracted rates are dropping on key trading corridors, following on the heels of declining spot prices. However, since they’re replacing expiring agreements with considerably lower rates, the average paid by all shippers is still climbing.

The question is, for how long?

“There’s no doubt the major carriers have had it their way in negotiations for some time,” notes Patrik Berglund, Xeneta CEO. “The spectacular results they saw in 2021 will no doubt be repeated, and even bettered, this year, as seen by the huge profits that defined many Q2 financial reports. But there is a sense that change is in the air.”

“Volumes are dropping and, as expected, long-term rates are beginning to follow the trend set by the spot market. When you add in an uncertain macroeconomic outlook, continuing supply chain issues – such as the industrial action we’ve seen occurring, or threatened, in major ports in Germany, the UK, and the US – and disruption in China due to the zero-COVID policy, it’s an unpleasant cocktail for the industry to swallow," he adds.

“In addition, you also have problems seemingly exacerbated by climate change, with low water levels impacting both power and factory production, as well as hinterland logistics chains. How will this challenge the longer-term outlook for carriers that have begun to look ‘bulletproof’? The data will reveal all, so to get the best value in negotiations, stay tuned.”

XSI® - US Imports/Exports  

The XSI® for US imports stands at 565.48 points at the end of August, following a month-on-month increase of 6.0%, an increase of 183.2% from a year ago and another record high. This suggests that the average rate shippers are paying continues to increase across all valid contracts. However, shippers looking to sign new long-term contracts should expect to see rates below the current market average.

XSI® - Europe Imports/Exports  

XSI - Far East Imports/Exports

The XSI® for exports out of the Far East stands at 634.89 points at the end of August, a 2.7% increase from last month and up by 90% since the end of 2021. The average rate paid by shippers importing into the Far East on long-term contracts has increased much slower than those for shippers exporting out of the Far East.

Note: Xeneta's XSI® is compiled from the very latest crowd-sourced ocean freight rate data aggregated worldwide. Companies participating in the benchmarking and market analytics platform include names such as ABB, Electrolux, Continental, Unilever, Nestle, L'Oréal, Thyssenkrupp, Volvo Group and John Deere, amongst others. 

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