The warning signs were already there, but the latest data from Oslo’s Xeneta suggests 2024 could be even more brutal than expected for carriers in the ocean freight shipping market, says an article published on xeneta website.
Global Warning Signs
Oslo’s Xeneta reveals alarming data, suggesting a potentially harsh 2024 for ocean freight carriers. The Xeneta Shipping Index (XSI®) dropped 4.1% in November, standing at 158.5 points, marking a significant 62.3% decline from November 2022.
Financial Strain And Propped-Up Index
Despite the global index being supported by older contracts from 2022, carriers, including major players, reported substantial financial losses in Q3. The XSI® reveals a challenging scenario, with potential massive losses for carriers as older contracts are replaced in early 2024.
Maersk’s Q3 Loss And Ominous Future
Maersk’s Q3 loss of EBIT USD 27m is noteworthy, considering its reliance on the long-term market. This loss raises concerns about future challenges as the XSI® is expected to drop further in 2024. The early arrival of anticipated challenges in Q1 2024 suggests a tough year ahead for carriers.
Capacity Management As A Lifeline
To avert catastrophic financial losses in 2024, carriers must focus on effective capacity management. However, achieving this will be exceptionally challenging in the current weak market conditions.
Regional Impact, Europe, Far East, And US
Europe: XSI® for European imports sees a significant 5.7% decrease in November, pointing to a challenging scenario despite some variations in North Europe and Mediterranean imports.
Far East: Far East exports experience a 2.6% drop in XSI®, even as accumulated year-to-date volumes turn positive compared to 2022. Shipping costs rise by 17.7% from November 2022.
US: Import XSI® for the US remains the highest, but a 2.5% drop in November indicates the industry’s challenges. Successful capacity management on the Far East to US West Coast trade is critical for rate protection.
Market Transparency And Adaptability
As the container shipping market faces uncertainty, market transparency becomes crucial. Adapting swiftly to shifting conditions requires intelligence and visibility, ensuring the success of businesses in this unpredictable environment.
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Source: Xeneta
