Freight rates for long-term ocean transport contracts fell by 1.8% in June compared to the same month last year, and by a further 0.6% compared to May (which closed with -1.2%).
The data was provided by the Danish company Xeneta,which has just published its latest monthly report on the XSI Public Indices.
The company’s chief executive, Patrik Berglund, said that over the last few months, companies in the industry had been working flat out in an attempt to balance supply and demand.
How? By removing excess tonnage from the main routes and constantly reviewing their strategies in an attempt to contain the tariff drops caused by the lockdown situation that has been paralyzing shipping.
Mr Berglund believes that what we have to ask ourselves now is whether carriers will be able to resist the temptation to immediately release new hold capacity in an attempt to increase their market share.
Carriers, in short, are scrambling to quickly get over their Covid hangover and regain the market shares they lost over the last few months. According to Xeneta, there is only one problem: if they do it too fast rates could crash. The next few months will therefore be crucial for the sector.
So, the future remains uncertain. This can also be seen from the data on regional trade developments in June published by Xeneta’s XSI.
In Europe, the import benchmark has continued to fall, dropping (for the fourth consecutive month) by 1.9%. Exports, on the other hand, have held out, down by only 0.3%. Both import and export benchmarks fell in the United States, with the former down 4.6% while the latter fell by 3.5%.
Imports from the Far East, on the other hand, increased by 1%, a good performance which is counterbalanced by the drop in exports (by 0.4%). However, year-on-year benchmarks remain positive, with imports up 7% and exports up 1.3% compared to 2019.
Translation by Giles Foster