Ocean Freight Rates Dip for 4-months in A Row

Credits: Alex Duffy/ Unsplash

The global XSI® fell to 419.8 in December, down by just 0.1% from November. The pace of decline has slowed since November, when the XSI® fell by 5.7% month on month. This is now the fourth month in a row that long-term ocean freight rates have dipped, with spot rates dramatically fallen since early summer. Despite this negative trend, the XSI® remains 70% up year-on-year after a strong start to 2022, reports Xeneta.

Expiring long term contracts

“The narrative for the beginning of 2023 looks to be very different,” says Patrik Berglund, Xeneta CEO, “This is really just the quiet before the storm,” he continues.

“As more and more long-term contracts expire in the new year, expect the XSI® to post far greater month-on-month declines. All indicators point towards considerable rate drops from today’s levels, with several of the major Far East trades pointing towards new long-term contracts that are much closer to the currently far lower spot rate benchmarks.”

XSI® – US Imports/Exports  

The sub-index for US imports rose by 1.4% in December, though at 545.9 points, it remains below where it was in October. In November, this index fell by 8.9% from October. Compared to December 2021, the index is up by 130.4%. 

The sub-index for US exports had the largest month-on-month growth in December, up by 2.7%. At 159.2 points in December, the index is at its second-highest level on record, beaten only by October. Compared to a year ago, the index is up by 35.9%.  

XSI® – Europe Imports/Exports  

The XSI® for European imports fell by 1.4% month on month to 390.7 index points. Compared to a year ago, the index is up by 44%. In the first ten months of the year, European imports of containers have fallen by 6.7%.

The XSI® for European exports also fell very gently in December, down by 0.3% from November to 383.9 points. Compared to December 2021, the index is still double what it was in December 2021.

XSI – Far East Imports/Exports

The XSI® sub-index for Far East imports is one of the trades that saw month-on-month growth in December, up by 2.3% to 214.4 points. The Far East import index is one of the few that has yet to see two months of consecutive decline. 

The sub-index for Far East exports fell by 0.6% from November to 558.0 points, its lowest level since May 2022. This export sub-index is heavily weighted in the global XSI®, given its importance to global container trade and has now fallen for five months in a row.  

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Source: Xeneta