16.8 C
Hamburg
Tuesday, June 18, 2024
Home Rates & Surcharges Xeneta expects "even more brutal" 2024 for ocean carriers

Xeneta expects “even more brutal” 2024 for ocean carriers

Norway-based ocean and air freight rate platform suggests that next year could be "even more brutal than expected" for ocean carriers in the freight market.

The Xeneta Shipping Index (XSI®) tracks real-time developments in global long-term contracted rates and figures released on 30 November show it fell by a further 4.7% in October. The XSI® now stands at 158.5 points, which is 62.3% lower than November 2022.

Emily Stausbøll, Xeneta market analyst, believes this latest development is an ominous sign for carriers. "The XSI® is an average of all long term contracts on the market – so, in essence, the global index is currently being propped up by those older contracts which were signed back in 2022 when rates were much higher," she said. "These older contracts with higher rates should have afforded some financial insulation throughout 2023, however we have still seen four of the major carriers post big financial losses in Q3."

Stausbøll stated the situation will get even worse as we enter the next year. She believes that those older contracts will largely be replaced in the early part of 2024 and carriers will be left exposed to the current weak market.

"We can be absolutely certain the new contracts will be signed at much lower rates than those signed at this time last year, so if carriers are already reporting losses, what are they going to be next year? We could be talking about extremely big numbers," wonders Stausbøll.

Xeneta market analyst pointed to Maersk’s loss of EBIT US$27 million in the third quarter as a particularly significant development in light of the latest XSI® figures. She commented, "Maersk relies heavily on the long term market so they should have been less impacted by the collapse in spot rates during 2023.

"The fact they still posted a loss in Q3 suggests there could be serious problems down the line when the XSI® drops further next year.

"We always knew there was a storm coming in Q1 2024 when the older contracts expired, but it seems as though it has arrived earlier than expected."

While the XSI® is down from the same period in 2022, long term rates remain up by 39.5% compared to November 2020, according to Xeneta.

Stausbøll concluded, "Long terms rates are solid compared to pre-pandemic, but this still hasn’t been enough for some of the biggest ocean liner shipping companies to deliver a positive operating margin in Q3 this year. The only way carriers can hope to avoid catastrophic financial losses in 2024 will be through capacity management, but it will be extremely tough to achieve."





Antonis Karamalegkos
Managing Editor

Latest Posts

Port of Montreal among North America’s greenest ports

For the 17th consecutive year, the Port of Montreal has been recognized for its sustainable development practices and environmental performance by Green Marine, the...

Leschaco Logistic Indonesia receives AEO certification

Leschaco Logistic Indonesia, a global logistics service provider, has recently been awarded the prestigious AEO (Authorized Economic Operator) certification, underscoring its commitment to delivering...

APM Terminals introduces Shipping Line Dashboard

Digital solutions are pivotal in modern terminal operations, offering unparalleled opportunities to accelerate and optimize cargo flow through container terminals. In a significant advancement in...

Clean-up of Antwerp oil spill completed

The clean-up operations of ships and quay walls are over at Deurganckdok at the Port of Antwerp-Bruges, after the recent oil spill. All vessels involved...

Shipping Market Leaders: Ratings and Reviews of Transportation Companies

Shipping and transportation industries support economic development, connect markets and international trade, and make everyday life more convenient. Finding the best shipping company cannot...