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The global XSI® posted its biggest ever month-on-month drop on record in Jan 2023. It fell by 13.3% from December, down to 364.15 points, making it the fifth month in a row of falling prices on the index. With little sign of change ahead, this will be a challenging year for the carriers.
January’s decline marks a significant increase in the pace of decline since December's 0.1% drop in prices. But, as Xeneta CEO Patrik Berglund explains, it wasn’t entirely unexpected.
"Global demand has fallen away, congestion has eased, equipment is available, and the macro-economic and geopolitical situations are, to say the least, complex," he states. "As a result of those market fundamentals, spot prices have collapsed, spiraling downwards since late summer 2022.
However, the carriers have managed to protect long-term rates from the worst impacts until now."
He continues: "With the dawn of 2023, many of the contracts negotiated last year have expired. Shippers, well aware of market dynamics turning in their favor, have reacted, pushing carriers for major rate reductions. What we're seeing now is the effect of that as new contracts enter validity. And, for the carriers, worse is set to come."
XSI® - US Imports/Exports
The XSI® for the US imports fell by 15.8% from December, down to 459.73 points. It's the fastest m-o-m decline of this sub-index on record and the fourth month in a row in which it has fallen. The XSI® for the US exports was one of the two sub-indices that didn't register a record-high drop. It fell by 1.3% from December, landing at 157.21 points in January 2023.
XSI® - Europe Imports/Exports
The XSI® for European imports fell to 353.3 points in January, a 9.6 drop from December. Compared to the start of 2022, the XSI® is still up by 40.9%. The XSI® for European exports fell by 5.2%, down to 363.49 points. The m-o-m drop is not the largest on record, leaving the index up by 83.0% from January 2022.
XSI - Far East Imports/Exports
The XSI® for exports out of the Far East had the largest m-o-m drop, falling by 18.1% to 456.86 points in January. Compared to a year ago, it is up by 41.0%. As with the other regions, the sub-index, representing the smaller trade flow (in this case from Far East import), didn't post a record decline. It fell by 3.2% to 207.59 points.
Note: Xeneta's XSI® is compiled from the 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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