September 2023: Ocean freight's revival?
Little uptick offers glimmer of hope for carriers looking for signs of market recovery
After a year of consistent drops in ocean freight rates, September finally saw a small boost of 0.2 percent, according to the global Xeneta Shipping Index (XSI).
"Though it's still 62.2 percent below last August's peak, this little uptick offers a glimmer of hope for carriers looking for signs of market recovery," says the latest update.
"By the end of Q3, the global XSI was down by 16.5 percent compared to the previous quarter. This dip will show in the industry's Q3 results, hinting that carriers, particularly those in the long-term market, will report even lower freight rates than in a challenging Q2."
Spot rates have been more of a mixed bag with those on the Transpacific having more than doubled in the same quarter, thanks to the implementation of strict capacity management by carriers, the update added. "Other trades are still experiencing record low spot rates with carriers seemingly choosing to sacrifice rate pressure on some routes through added capacity while reducing sailings on others to bolster prices."
European imports & exports
In September, the European imports sub-index increased by 1.8 percent to 182 points though it's down 59.3 percent from last year. "As European shippers gear up for the major tendering season, this boost is a relief amidst consistent declines in the XSI. Conversely, the European exports index dipped by 2.2 percent to 183.9 points, its lowest since October 2021."
U.S. imports & exports
The XSI for U.S. imports plummeted to 192.4 points, its lowest since June 2021, and yet remains the highest sub-index. "As spot rates rise amidst falling long-term rates, shippers should consider securing new contracts. Meanwhile, the US exports XSI dropped slightly, but its year-on-year decrease is notably less severe than other indices, reflecting its historically steadier rates."
Far East import & exports
In September, the index for Far East exports, the world's largest trade, grew to 164.1 points, marking a 1.4 percent rise after thirteen consecutive monthly declines. "Meanwhile, the import index into the region decreased by 1.5 percent to 1160 points, erasing nearly all gains from the past two and a half years. The last time rates for long-term contracts into the Far East were this low was in January 2021 but by February 2021, carriers had boosted the index by 35.7 points due to soaring spot rates."