XSI April 2023
In April, the global XSI experienced a 10.6% decline from March, reaching 309.1 points. However, it remains 5.0% higher than it was in April of the...
<p>XSI® Monthly Report</p>
<p>XENETA SHIPPING INDEX OCEAN FREIGHT CONTRACT MARKET April 2023</p>
<p>-10.6% MoM</p>
<p>In April, the global XSI® experienced a 10.6% decline from March, reaching 309.1 points. This is the lowest year-on-year growth recorded in the global XSI® since January 2021. </p>
XSI® Global
New contracts cause sharp decline in global XSI® and sub-indices
In April, the global XSI experienced a 10.6% decline from March, reaching 309.1 points. However, it remains 5.0% higher than it was in April of the previous year. This represents the lowest year-on-year growth recorded in the global XSI since January 2021. To provide context, in April 2022, the XSI was 118.5% higher than it was in the same month the previous year.
The larger declines observed in the global XSI® and its sub-indices can be attributed to the commencement of numerous new contracts at the start of the second quarter.
The global XSI® has experienced a 13.6% decline since the beginning of the year, adding to the strain on carriers' margins. The carriers had already been experiencing a decrease in their average rates in Q4, mainly due to the frailty in the spot market.
As Q1 outcomes have begun to surface, carriers have shown even more significant decreases in their average ocean freight rates. With the advent of Q2, it seems unlikely that the current quarter will be able to reverse the carriers' fortunes.
March's 0.5% drop was a prelude to new contracts with lower prices in April, causing the significant impact seen now.
Patrik Berglund, CEO of Xeneta
<p>XSI® Europe</p>
<p><b>Imports & Exports</b><br>Record-Breaking Decline in XSI® for European Imports, Exports Also Drop Double-Digit</p>
XSI® Europe
Imports
At the beginning of Q2, there has been a notable record-breaking month-on-month decline in the XSI® for European imports, with a fall of 19.5% from March, bringing it down to 261.1 points. The most significant month-on-month decrease recorded previously was an 11.9% fall in January 2023.
With the exception of long-term container rates between Southern Africa to North Europe, all sub-trades into Europe experienced month-on-month declines in April.
XSI® Europe Imports | CLICK TO ENLARGE
XSI® Europe Exports | CLICK TO ENLARGE
April’s XSI® makes for grim reading for carriers. After over two years of spectacular container rates growth, they’re now watching both volumes and margins steadily dissolve.
Patrik Berglund, CEO of XenetaExports
In April, the XSI® for European exports witnessed a double-digit decline, dropping by 15.8% to reach 296.1 points. This is the first time it has fallen below an index reading of 300 (where index 100 = January 2017) since April of the previous year.
During the initial two months of the year, total imports into Europe experienced a 9.1% decline, with February recording the lowest number of inbound containers since February 2020. Furthermore, the pace of decline in exports out of the region has accelerated at the beginning of this year compared to the end of 2022, with a 10.0% decrease so far, compared to an annual decline of 6.4% in 2022.
<p>XSI® Far East</p>
<p><b>Imports & Exports</b> <br>Far East Corridors See Double-Digit Dips and 14% Volume Drop</p>
XSI® Far East
Far East Exports Drop 10% in April while Carriers Boost Filling Factor Despite Low Demand
The XSI® for Far East exports experienced a decline in April, falling to 366.6 points, which marked its lowest level since February 2022 and represented a 10% decrease from March. Since the start of the year, the XSI® for Far East exports has experienced an 18.2% decline.
Similarly, the XSI® for Far East imports decreased by 15.5% in April, reaching 159.6 points, which was its lowest level since October 2021.
Although exports out of the Far East are still facing low demand, carriers have been able to improve their filling factor slightly due to a reduction in capacity.
By removing services and blanking sailings, the average filling factor from the Far East to Europe, the US, and the East Coast of South America increased from 84% in Q4 2022 to 87% in Q1 2023.
Despite that this is still lower than the highs in 2021 and 2022 by a few percentage points, it is a remarkable accomplishment given the 14.0% drop in volumes out of the Far East.
Far East Corridors See Double-Digit Dips and 14% Volume Drop
XSI® Far East Imports | CLICK TO ENLARGE
XSI® Far East Exports | CLICK TO ENLARGE
<p>XSI® US</p>
<p><b>Imports & Exports</b> <br>US Import XSI® Drops Slightly, Spot Rates Increase While Export XSI® Plummets</p>
XSI® US
US Import XSI® Drops Slightly, Spot Rates Rise Amid Contract Expirations. US Export XSI® Takes Steepest Dip in Years.
The XSI® for US imports experienced the smallest month-on-month decline among the XSI® sub-indices, dropping by 1.5% from March to 451.5 points, which is the same level as in January 2023.
The beginning of Q2 is not as significant of a milestone as May 1st for trades into the US. This is because many 12-month contracts are set to expire on that date and newly negotiated contracts will come into effect.
Unlike long-term container rates, spot rates increased in mid-April. Carriers implemented General Rate Increases (GRIs) on both US coasts from the Far East.
This was likely done to exert pressure on shippers who are postponing the signing of new long-term contracts or luring freight forwarders, many of whom have shifted to the spot market, back to long-term agreements.
The XSI® for US exports experienced the biggest decline among all the sub-indices, as opposed to US imports. It dropped by 18.9% to 145.3 points, resulting in the trade having the lowest growth rate compared to January 2017.
Tale of Two Trades
US Import XSI® drops slightly while export XSI® collapses by 18.9%.
Zooming in
It's all in the data…
“The picture is complex and, as with wider market drivers and geopolitical maneuvering, problematic to predict. But it’s difficult to see signs of upswing on the horizon in Q2 as we leave behind a challenging Q1.
Patrik Berglund, CEO of Xeneta
XSI® US Exports
XSI for US exports saw the largest month-on-month drop of all the sub-indices, collapsing 18.9%. This is now the trade with the lowest levels of increase since January 2017.
XSI® US Imports
The US Import XSI® saw a slight month-on-month dip of 1.5%. Yet, with new contracts set to take effect on May 1st, this could obscure the long-term contracted reality.
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XSI® Public Indices Report
Methodology
XSI ® Public Indices Report
Methodology
Rates delivered from freight forwarders and shippers
Based on long-term contracts only = any contract that is valid for longer than 88 days
Rates pulled from Xeneta’s ocean freight platform of +300m contracted rates
Indices based on an aggregation of trade-weighted corridors
Indices rates surcharges are based on all-in CY/CY pricing methodology
The global index is a combination of worldwide trade-weighted corridors not limited to the US, Europe and the Far East indices
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Disclaimer
The monthly XSI® Public Indices report gives an indication of the global market movements for the long-term contract market in the container shipping industry, focusing on the biggest regions in the world.
Xeneta does not recommend price-setting on this market report as it is based on an aggregation of trade-weighted uncorrelated corridors. If you are interested in index-based contracting, we recommend our XSI® index-linked contracting product. For more information, please contact us via www.xeneta.com
Xeneta is the leading ocean and air freight rate benchmarking, market analytics platform and ocean container rate index, Xeneta Shipping Index (XSI®).
Xeneta’s powerful reporting and analytics platform and data density provide liner-shipping stakeholders the insights they need to understand current and historical market behavior – reporting live on market average and low/high movements for both short and long-term contracts.
Xeneta’s data is comprised of over +300 million contracted container rates and covers over 160,000 global trade routes. Xeneta is a privately held company with headquarters in Oslo, Norway and regional offices in New York and Hamburg. To learn more, please visit www.xeneta.com
NOTE: The XSI® public indices reports are based on long-term contracts only.
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