- Timing Contract Negotiations Amid Shifting Freight Rates.
- Rising Port Fees Add Costs Beyond Freight Rates.
- Data is used to gain Freight Market Insight.
On the surface, softening spot rates might seem like a relief for shippers, but look a bit deeper and the picture gets more complex. Phil Hennessey, Director of External Communications, and Shubham Bhattacharya, Lead Product Manager, recently conducted a webinar to explore this volatile market and examine how spot and long-term rates are moving, reports Xeneta.
What Is the Risk of Holding Spot Rates?
Markets have been declining since January this year, with Far East rates down 51% into the US East Coast, 44% into the US West Coast, 50% into North Europe, and 44% into the Mediterranean. Transatlantic rates are also 19% down, adding to a massive decline across the board so far in 2025.
But relative to December 2023, at the time of the build-up of the Red Sea Crisis, rates are still high. Far East rates are still +56% into the US East Coast, +74% into the US West Coast, +59% into North Europe, and +66% into the Mediterranean, with transatlantic rates +59%.
Timing Negotiations with Rate Trends
Time to market—and recognising trends in spot rates relative to long-term norms—is essential for shippers negotiating contracts. For instance, comparing the variation between spot rates and long-term averages from April 2024 to April 2025 from Vietnam to Los Angeles:
- The difference at point A, the peak of the Red Sea Crisis, was $5,556.
- The difference at point B, the beginning of President Trump’s second term, was $2,038.
- The difference at point C decreased to $382.
Shipments would be in quite different bargaining stances at points A, B, and C. By spacing out your negotiations and showing a clear grasp of market psychology, you can make a fact-supported case in every negotiation.
Rates Are Only Part of the Cost Picture
While rates may be trending down, this rarely translates to lower overall fees. Tariffs and port fees also play significant roles.
“We always talk about rates, but it’s more than just rates. There’s so many parameters beyond just the commercial ones, where there’s a lot of operational and performance metrics that shippers need to really look into.”said Shubham Bhattacharya, Lead Product Manager at Xeneta
The Complicated Effect of Port Charges on Carriers
Non-Chinese carriers could benefit if restrictions are aimed at Chinese parties specifically. Nevertheless, their use of Chinese ports makes things complicated. Any disruption to Chinese ports could cascade throughout the industry, even hitting non-Chinese carriers.
Consumers and shippers will end up covering part of the cost as soon as the new charges are effective in October 2025. Chinese shipping lines have a greater expense, with additional hikes to be seen in the future. This could cause surcharges to be transferred to shippers. “People should be aware that just because it’s not a Chinese carrier, just because it’s not a Chinese vessel … doesn’t mean to say that they couldn’t be hit with a surcharge.”
said Phil Hennessey, Director of External Communications at Xeneta
Preparing for Evolving Market Conditions
Shippers must keep a close eye on port-level data and scrutinise contract terms with suppliers and carriers to learn the way costs might be borne or passed along.
Utilising Data for Market Understanding
Port-level data is utilised by customers at Xeneta for in-depth understanding of rate trends, tracking contracts, learning about supplier weaknesses and strengths, and examining operational metrics.
With more than 600 million data points and 15 million new ones every month, Xeneta provides more than data—it delivers expert analysts and a community to assist clients in maximising their approach.
Did you subscribe to our daily Newsletter?
It’s Free Click here to Subscribe!
Source: Xeneta
