According to research by Xeneta, long term rates on the transatlantic front-haul to the US East Coast were up 144% on 2019 levels as of early May 2023, while the trade to the South American East Coast was up 111%, says an article published on Seatrade-maritime.
Long-term rates
“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 $524 per feu,” said Peter Sand, Chief Analyst, Xeneta.
Freight rates
On the spot market, freight rates on the main export corridors were down by almost 70% compared to 2019 levels, according to Xeneta, which listed the five main European export corridors as the Mediterranean, Far East, Middle East, US East Coast, and South American East Coast.
Pre-pandemic average
“All arrows are pointing down, with dramatic falls across the board,” said Sand.
“The biggest lanes are also the biggest losers, with the Far East corridor down 69% year-on-year. Spot prices for the trade are now just under $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 $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 $2,745 per feu.”
Long-term export contract
Longer term contract rates lag the spot market as prices are fixed for multiple months, with adjustments occurring at renewals and renegotiations.
Xeneta said that long-term export contract developments in Europe were “equally depressing for carriers”, falling over the past three months by 45% compared to peak levels; declines ranged between 26% on the Middle East bound trade, to 59% on the short haul Mediterranean route.
The question arises
Some routes are yet to fully reflect the collapse of spot rates in longer term contracts. “So, the question arises, does this point to relative strength, or the capacity for further heavy falls in the months to come?” asked Sand.
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Source: seatrade-maritime
