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.
The Xeneta Shipping Index (XSI®) tracks real-time developments in global long-term contracted rates and figures released today show it fell by a further 4.1% in November.
The XSI® now stands at 158.5 points, which is 62.3% lower than November 2022.
Ominous sign
Emily Stausbøll, Xeneta Market Analyst, believes this latest development is an ominous sign for carriers.
“These older contracts with higher rates should have afforded some financial insulation throughout 2023, however we have still seen four of the major carriers post big financial losses in Q3”, she said.
Loss of EBIT USD
Stausbøll pointed to Maersk’s loss of EBIT USD 27m in Q3 as a particularly significant development in light of the latest XSI® figures.
She said: “Maersk relies heavily on the long term market so they should have been less impacted by the collapse in spot rates during 2023.The fact they still posted a loss in Q3 suggests there could be serious problems down the line when the XSI® drops further next year.We always knew there was a storm coming in Q1 2024 when the older contracts expired, but it seems as though it has arrived earlier than expected.”
Stausbøll said: “Long terms rates are solid compared to pre-pandemic, but this still hasn’t been enough for some of the biggest ocean liner shipping companies to deliver a positive operating margin in Q3 this year.”
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Source : Xeneta
