Spot rates on the main corridors out of Europe down by close to 70% - Xeneta
The cost of shipping containers out of Europe has plummeted from the peak prices of 2021 and 2022, with spot rates on the main corridors down by close to 70%, according to Xeneta. However, according to the latest data from Oslo-based Xeneta, some trade lanes are still capable of commanding prices far above pre-pandemic levels, with recent long-term contracts on selected corridors over 100% more expensive than 2019 equivalents.
“All arrows are pointing down, with dramatic falls across the board,” says Peter Sand, Chief Analyst, Xeneta, when referring to prices on the five main European export trades (to the Mediterranean, Far East, Middle East, US East Coast, and South American East Coast).
“The biggest lanes are also the biggest losers, with the front haul Far East corridor down 69% year-on-year. Spot prices for the trade are now just under USD 600 per FEU, equivalent to 18% below the pre-pandemic average of 2019. The US East Coast route has experienced the sharpest decline in absolute dollar terms, with prices now a staggering USD 6 000 per FEU lower than their peak in mid-May 2022. As of early May spot prices on this recently very strong trade stood at USD 2 745 per FEU.”
Long-term contract developments in the region are, on the whole, equally depressing for carriers, with agreements signed within the last three months down an average of 45% against peak prices. The falls range from a 26% decline on the Middle East bound trade, to a fall of 59% on the short haul to the Mediterranean.
Starting with the spot rates he points out that the Far East corridor is the only trade where rates are currently below 2019 levels. By contrast, exports to the South American East Coast are currently 96% more expensive than they were in 2019, while rates to the Middle East are 47% up for the same period.
“Here we see rates in early May up more than 100% against 2019 levels. The trans-Atlantic front haul to US East Coast is a commanding 114% up, while the smaller, yet still essential, trade into the South American East Coast also shows triple digit growth, up 111% for the same period.
“In fact, the only trade with long-term rates significantly below 2019 levels is the shortest of them all, to the Mediterranean. Here we see rates down 38% since 2019 (and 59% since their peak in mid-August 2021), with current prices at USD 524 per FEU.”
Sand concludes that the rollercoaster rates ride will be “a natural focus” for logistics professionals attending the main Munich shows Transport Logistic 2023 and Air Cargo Europe 2023 this week, but warns against oversimplifying current developments.
Xeneta is the leading ocean and air freight rate benchmarking and market intelligence platform transforming the shipping and logistics industry. Xeneta’s powerful reporting and analytics platform provides liner-shipping stakeholders the data they need to understand current and historical market behavior – reporting live on market average and low/high movements for both short and long-term contracts. Xeneta’s data is comprised of over 300 million contracted container and air freight rates and covers over 160,000 global ocean trade routes and over 40,000 airport-airport connections. Xeneta is a privately held company with headquarters in Oslo, Norway and regional offices in New York and Hamburg.
