Xeneta’s index for shipping freight, XSI, has recorded significant falls for the third month in a row, with the November global figure showing the biggest slump since the company’s benchmark was established in 2019.
It is the first month since October 2021 that the index is less than double the corresponding month a year earlier. Compared to November 2021 the rise is still 67.2%. The XSI in November stood at 420.15, the lowest level since May. Xeneta says the decline will trigger a reduction in the average rates charged by carriers and brings an end to record-breaking quarters.
‘Q3 results for several large carriers showed their average rate increased from Q2, despite the collapse in the spot market,’ Xeneta’s latest report states. ‘However, with long-term rates now firmly coming down, carriers will no longer be able to hide falling volumes behind higher rates.’
The XSI for European imports fell for the third month in a row, though at a slower pace than in October. The index now stands at 396.13, 3.5% lower than in October. But compared to a year earlier, the index is still up by 47.9%.
The report notes that imports into Europe have fallen by 5% in the first nine months of the year, with volumes falling to their lowest level of the year in September.
‘The lack of peak season has allowed ports to clear up some of the backlogs, but congestion remains high as shippers are increasingly using the port as storage for goods they don’t yet need due to lower demand.’
Xeneta says its Far East export index fell to 561.24 points in November, the first time below 600 since May. This was an 8.5% fall compared to October, the biggest month-on-month drop on record and the fourth month in a row with a fall.
The Far East import index fell by 6.2% in November to 209.69 points. Up by 30.9% from November 2021, this is the XSI sub-index with the lowest year-on-year growth. The US import index fell to 538.18 in November, down by 8.9% from October.
‘Volumes on the transpacific continue to be muted, though spot rates on the transpacific seem to have stabilised at a low level,’ the report notes. ‘Some carriers are reporting that a few of their services are now below breakeven levels. On the long-term market, the average rate for all valid long-term contracts from the Far East to the US has seen double-digit drops over the past month, leading the way for the index to fall.’
The index for US exports fell by 5.3% in November to 155.09 points. This still marks a 25.4% increase since the start of the year and up by 38.6% from November 2021.
‘The shift in market dynamics and carriers’ hunger for volumes has eased the pressure on US exports, who are once again able to find suppliers willing to take their volumes at the rates they are used to paying.’