The ocean container shipping market reached a tipping point in July, with long term rates on major fronthaul trades showing signs of life just as spiraling short term rates begin to soften.
The Xeneta Global XSI®, which covers all valid long term contracts in the market, edged up 2.5% in July to stand at 151.5 points.
Emily Stausbøll, Xeneta Senior Shipping Analyst, said: “Long term ocean container shipping rates remained subdued despite massive increases on the short term market in May and June – but that is starting to change.”
Increasing rates
Increasing long term rates and decreasing short term rates means the spread is narrowing between the markets, which presents a delicate balance ahead of long term contract negotiations between shippers and carriers later this year.
“A few weeks ago, when spot rates were still spiraling, carriers would have been feeling confident about long term contract negotiations – but market sentiment can change very quickly.Shippers won’t want to see the long term market starting to increase because it has already been a bruising 2024 in the spot market. But they should have cautious optimism because, at the moment, it feels like there is more room for spot rates to fall than there is for long term rates to rise.”
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Source: Xeneta
