This is our WEEKLY FREIGHT RATE UPDATE: Cold reception for reefers in China sees volumes, and rates, slip on main Europe to Far East trade
Link to Xeneta’s website for the full story: https://hubs.ly/Q01zj0fD0
Below is an extract only.
January 26, 2023 – Oslo, Norway –– The traditionally resilient trade in reefers from Europe to the Far East appears to be slowly succumbing to the same market forces as the rest of the containerized ocean freight sector, with sustained declines in volume now being followed by spot and long-term rates falls.
Role reversal
According to the latest data from Oslo’s Xeneta, the spot rate on the leading fronthaul reefer route now sits at USD 4 240 per FEU (23 January 2023). After a period of almost two years defined by prices in excess of USD 5 000 per FEU reefer container, a sharp fall in December has changed the character of the market, with spot rates now below-contracted prices for the first time since October 2019. Xeneta’s crowd-sourced data shows a current long-term rate just shy of USD 4 500 per FEU reefer after peaking in September last year at USD 4 850.
Prolonged decline
“Spot rates falling below long-term contracts is a classic sign of a weak market,” comments Peter Sand, Chief Analyst, Xeneta. “This is one of the world’s busiest reefer routes, with a strong rates track record, but even […]
China goes soft
[…]
“Softening demand from China is the culprit here,” Sand states. “Over the 11-month period, we actually witnessed a year-on-year fall in demand of 30% to China, equivalent to 115 000 TEU. The only reason the overall loss to the Far East was less than this is that demand into North Asia and Southeast Asia actually grew by 7.2% and 2.6%, respectively. These shifts saw China’s overall share of the reefer business on the corridor fall from 51% in 2021 to 41% last year. Time will tell if this trend continues.”
Mind the gaps
Despite the declining rates, Xeneta’s historical data shows that prices remain “relatively strong”. In the third quarter of 2019, long-term reefer contracts could be signed for “only” USD 2 000 per FEU.
“So, there’s unquestionably room for more movement here,” Sand concludes. “It’ll be interesting to see if […]
It’ll be fascinating to watch the data and discover what comes next for both shippers and the carrier community.”
