Carrier will prevail at sea freight according to Xeneta
In the first quarter of 2017, spot market rates for ocean freight almost returned to the 2015 level. Al- most everywhere, carriers were able to achieve higher transport prices than in the comparable period of 2016. In turn, shippers face the challenge of being able to secure capacities in the short and long term at a good price in order to ship their goods outside Europe. This was reported by the platform for the benchmarking of sea freight rates and market analyzes Xeneta AS in a press release.
The spot market prices for 40-foot containers on the Far East-Northern Europe route have not fallen as far as expected in the first quarter of 2017. As usual, many companies had postponed the price negotiations to post Chinese New Year festivals, but according to Xeneta, average market prices were flattened from USD 2,000 on January 1 to USD 1,780 at the end of March.
By comparison, the first quarter of 2016 provided the carriers with a strong rate decline and new low price records up to an average of USD 600 at container rates. The same was true for long-term contracts, which averaged USD 900 USD in the first quarter of 2016. 2017, however, they are moving around USD 1,250 to USD 1,400.
Also in the spot market for the Far East – North America West Route, the rates fell to an average of USD 900 in 2016, in 2017 only to USD 1,400. The long-term contracts for this route are currently up to USD 2,000, compared to USD 1,600 in 2016. In April 2016, an average of USD 507 could be paid for a 40-foot container for the route “Northern Europe Main Harbors – China Main Harbors”, 2017 brings an increase of 279 per cent with USD 1,919.
The further market developments are currently unpredictable. American companies are beginning to negotiate with the carriers in the spring and summer months, which will change prices again. European companies should pay attention to May and the follow-up months. Because the sea freight contracts, which were signed at low prices last year, will now be phased out, Xeneta sees the carriers in the stronger position when new contracts come into play.
“This will undoubtedly push the market further, as it can be assumed that the higher rates completed in the Asia-Europe corridor will also apply to the Trans-Pacific corridor,” predicts Thomas Sørbø, CBDO & Co-founder at Xeneta. “There is an upward trend in the longer-term rates from Asia to Europe. But the difference between spot market and long-term contracts is at such an extremely high level, as we have not seen for a long time. ”