The carrier segment appears to be negotiating the coronavirus storm with some success safeguarding its vital long-term ocean freight rates reports Xeneta in its latest XSI® Public Indices report which tracks the ocean freight market based on crowd-sourced data from leading shippers.
“We’ve seen contracted rates holding comparatively steady while spot rates have actually been rising from April and through May and June,” says Xeneta CEO Patrik Berglund. “Given the short- and mid-term macro-economic situation that’s taken many by surprise. The key has been carriers conducting a delicate balancing act to remove tonnage and adjust routes in accordance with demand. However, it’s difficult to maintain that for the long-term and, let’s face it, the virus is not going anywhere fast – so what’s the next step?”
Analyzing over 200 million data points, covering more than 160,000 port-to-port pairings and major shipping including ABB, Electrolux, Continental, Unilever, Lenovo, Nestle, L’Oréal, and Thyssenkrupp, amongst others, Xeneta reports the index crept up turning slightly positive in July. The report highlights after two months of slight rate declines – although nowhere near as dramatic as industry observers had feared given the pandemic’s severity – that the index is basically flat for 2020 and down less than one percent year-over-year.
Berglund attributes the relatively minor movements to the proactivity of owners, as they continue to perform a “delicate balancing act” with supply and demand. He says readers of the index may be surprised by the moderately small adjustments, given the huge economic impact of the virus, but highlights that carriers are constantly moving to ensure rates are protected.
Xeneta’s latest intelligence shows that spot rates have however begun to slide on key Far East-North Europe and the Far East – US West Coast trades, suggesting the recent reinstatement of routes and tonnage is driving down prices. Berglund says that carriers will face a difficult decision to either keep reintroducing tonnage and try and gain market share, yet undermine rates, or withhold services to keep propping up rates.
The XSI® Public Indices’ regional analysis of major trading routes painted a mixed picture for July. After four months of decline, imports on the European XSI® increased slightly while still down slightly for the year. The export benchmark however registered its steepest fall since October with a decline of two percent but remains up over three percent up year-on-year. Developments in the Far East were negative, with a significant drop in import rates and a smaller drop in the export figure.
The U.S. markets showed a marginal decline in imports while exports registered a healthy rise reversing two months of decline. Despite the increase, Xeneta reports the index remains down over three percent year-on-year and down more than two percent so far in 2020.
“The carriers have been working flat out on strategy and that has maintained a relatively solid rates course in this most trying of times. However, they can’t control external factors and key indicators are undoubtedly a cause for concern,” concludes Berglund. “It’s a highly complex picture, and that creates a real challenge for both carriers to effectively manage rates and shippers to know what they should be paying to gain real value for cargoes. With that in mind, the latest market intelligence is absolutely key.”
Go to Source
A massive fire broke out at the Port of Beirut on Thursday, incinerating a warehouse full of tires and oil within the port’s free zone. The same area was heavily damaged in the ammonium nitrate explosion that leveled the central port area and the adjacent waterfront on August 4. According to Lebanon’s civil defense agency, […]
The National Transportation Safety Board (NTSB) has released a Marine Accident Brief about an accident that occurred on April 15, 2019, involving the towing vessel DeJeanne Maria which struck the end of a submerged dredge pipeline while pushing two spud barges to the Gulf of Mexico. The incident occurred on the Mississippi River in Pass […]
DSV Belgium has solid experience in the transport of pharmaceutical products for different customers. With a pharma hub based at Brussels Airport a lot of experience and know-how has been built up over the years. Last weekend, the forwarder handled one hundred million mouth masks, an important milestone for its Belgian organisation that has put […]
Best known as a leading passenger airport serving Germany’s most populated federal state North Rhine-Westphalia, Düsseldorf has become transformed into a vital distribution point, during the COVID 19 pandemic, for medical equipment and other life-saving goods, mostly from China. Gerton Hulsman, managing director of cargo operations, reports that the handling teams are working hard to […]
With close to 100 daily cargo flights operated to a destination network spanning more than 65 cities across six continents, Emirates SkyCargo is delivering essential supplies and commodities to people around the world. The air cargo carrier is currently operating 11 Boeing 777 freighter aircraft, each with a capacity to transport about 100 tonnes of […]
Operators can continue to use pilots and other crew members who have unable to comply with certain training, recent experience, testing, and checking requirements due to the COVID-19 outbreak in support of essential operations. Additionally, this Special Federal Aviation Regulation (SFAR) provides regulatory relief to certain persons and pilot schools unable to meet duration and […]
Astral Aviation has increased its intra-African network with cargo freighters during the pandemic. While there has been a reduction in capacity to, from, and within Africa, which has been caused by a stoppage of passenger flights and limited frequencies on freighter aircraft, Astral Aviation continues to operate cargo freighters from its Nairobi hub to 13 destinations […]
Emirates SkyCargo has expanded its weekly scheduled cargo flight operations to cover 75 destinations across six continents. Through its wider reach, Emirates SkyCargo is able to transport essential commodities and other urgently needed cargo more rapidly across the world, allowing exporters and importers across markets to benefit from direct access to widebody cargo capacity. Some […]
The UK government’s new post-Brexit tariff regime will result in both winners and losers. The new regime is set to replace the European Union’s Common External Tariff from the end of the Brexit Transition Period on December 31, 2020. The UK’s commitment to the ongoing Brexit process and ending the UK’s transition from EU membership […]
Global commercial aviation charter company Albion Aviation Group is reporting that it is seeing a considerable uptake in its professional cargo broker training courses from the current global pandemic crisis and surge in charter demand. “We have completed a number webinar courses for a whole of host of companies, looking to manage their own cargo […]
Callan Marine is serving as the prime contractor to the Texas Department of Transportation for a maintenance dredging project located at the Bolivar Ferry Terminal, in Galveston, Texas. Work began in May and is estimated to be complete in late July 2020. The project consists of the removal of 600,000 cubic yards of material and […]
The U-Freight Group (UFL), with its considerable involvement in eCommerce logistics, says that the latest statistics showing that global e-commerce sales hit $25.6 trillion in 2018 are a further vindication of its decision to enter this sector of the international freight market several years ago. The latest available estimates, up 8% from 2017, were recently […]
NOAA Fisheries announced Friday that it will cancel five out of its six large-scale research surveys in Alaskan waters this year due to COVID-19. The canceled surveys include the Aleutian Islands bottom trawl survey, the eastern Bering Sea bottom trawl survey, the northern Bering Sea bottom trawl survey, the Bering Sea pollock acoustics survey, and […]
Qatar Airways Cargo transported 56 SkyCell containers with vaccines from one of the largest vaccine manufacturers worldwide on its scheduled freighter and belly-hold cargo flights for its customer, CEVA Logistics. The 54-tonne shipment consisting of pneumococcal and varicella vaccines were flown from Brussels to Mumbai via the carrier’s hub in Doha on two separate flights. […]
Network Airline Management and TAAG Angola Airlines are pleased to announce the renewal of their long-term freighter aircraft contract by an additional 12 months, sealing an ongoing partnership for the foreseeable future. Operating a regular weekly scheduled service from Liege, Belgium, to the capital of Angola, Luanda, Network Airline Management provides a Boeing 747-400F aircraft […]
Tigers has launched a new dedicated Personal Protective Equipment (PPE) section on its eShop, powered by its freight portal SmartHub:Connect. The global logistics and transportation company has also released new software updates for SmartHub:Connect, giving customers shortcuts to buy and process documentation for the shipment of PPE. Tigers is also managing the door-to-door transport of […]