Despite a significant decline in spot container shipping rates (already below the last year’s level according to the Drewry index), long-term contracted ocean freight rates have been breaking records for four consecutive months and, according to Xeneta analytical agency, increased by 10% in June compared to May. Since the beginning of the year, the value of the XSI Public Index has grown by more than 70%. Compared to June 2021, contracted rates have increased by 170%.
The sub-index of long-term rates for the transportation of Asian container imports increased in June by 5.0% compared to May (+62.5% in June 2022 compared to June 2021; +33.3% since the beginning of the year). The export sub-index for Asia has grown more significantly: +11.6% (+200.6% in June versus June 2021; +81.3% since the beginning of the year).
Contracted rates for the delivery of imports to Europe increased last month by 13.7% (+163% in June versus June 2021; +58.9% since the beginning of the year). Export rates showed an increase of 6.2% last month (+148.2% in June compared to June 2021; +84.9% since the beginning of the year).
Let us remember that spot rates (according to the Drewry index) for the delivery of containers from China to the European ports of the Mediterranean Sea in June were 2.3% lower than last year. The drop on routes to the ports of Northern Europe was 19.8%.
Xeneta experts point to the drop in spot rates, which may increasingly discourage shippers from concluding standard long-term contracts. The situation is exacerbated by the imminent strikes in ports (in Europe and possibly in the US), which could further undermine the reliability of shipments. Furthermore, the United States signed the Ocean Shipping Reform Act into law intended to prevent shipping companies from gambling on the rise and fall of prices, and the escalation of inflation could affect consumer demand and slow down the economic activity.
According to various data, about 75% of shipments are carried out on a contractual basis.