An increase in US export activity and European imports has reversed the downward trend in rates for the container shipping industry, a XSI Public Indices report from Xeneta has shown.
The freight rate benchmarking and market intelligence platform has revealed that its index, which utilises a database of over 85m contracted freight rates, has indicated a month-on-month rise in long-term rates of 2.5%.
This small increase has halted a decline that has been on-going since August 2018 and Xeneta CEO Patrik Berglund noted that this provides “somewhat positive news” for the container industry.
The upward trend comes despite mixed financial results posted by major carriers – with the ONE alliance posting negative figures while Maersk recorded solid profits – and on-going concerns about new tariffs in the China-US “trade war”.
However, Berglund added: “As ever in this highly complex and unpredictable segment, it’s not straightforward – with some regions less encouraging than others, while Brexit and the March 1 deadline for China-US trade negotiations loom large – but there are notable performances here.
“That is something that will not doubt be savoured. Especially in the US.”
The US export indicator in XSI experienced an 8% rise, therefore reversing the declines of the previous year and putting the benchmark on par with March 2018 values, while imports barely changed at a decrease of 0.1%.
The European import benchmark climbed by 3.9%, which translates to a year-on-year increase of 7.1% and a 2.5% rise since the end of 2018 while its export indicator rose 0.5%.
Berglund warned that there is a potential that the Ocean Alliance’s seventh loop service in April, including ten 13-14,000 teu ships from Evergreen, will outstrip demand and exert downward rates pressure.
The Far East, however, is a mixed picture as its import performance saw a monthly fall of 2.6%, part of a long-term decline as it fell by 14.2% year-on-year although exports are more stable down only 0.2% but 0.9% above last year.
Berglund said: “There are complex factors at play here, but it’s impossible not to see the shadow of Presidents Trump and Xi falling over regional developments.”
He advised that all parties seeking to get the best value for their assets and cargoes must watch the market closely as there due to the uncertain geopolitical and economic year in store.
Berglund added: “We can only be certain of further uncertainty. So it’s vital that all the stakeholders in the container shipping value chain avail themselves of the latest intelligence to ensure they enter contract negotiations fully informed and ready to get the best deal.
“No one can afford to ignore what’s going around them right now.”