<p>The Global XSI suffered its largest ever month-on-month drop in May, falling by 27.5% from April to hit 224.0 points. This is now the lowest Global XSI level since October 2021. </p>
The Global XSI suffered its largest ever month-on-month drop in May, falling by 27.5% from April to hit 224.0 points. This is now the lowest Global XSI level since October 2021.
May’s fall marks the ninth consecutive month of drops for the global XSI®. The start of the first and second quarters of 2023 saw significant declines as new long-term contracts entered validity. May has seen the next stage of this development, as existing 12-month contracts in the US come to a conclusion and new, much lower agreements - reflecting the realities of today’s subdued markets - come into force.
The seasonality of contracting means that just as May this year saw the largest month-on-month drop in XSI history, this time last year saw the biggest increase. This also means that year-on-year comparisons are now in negative territory for the first time since late 2020. The global XSI® in May 2023 is 42% lower than it was in May 2022.
This collapse in long-term rates will be particularly painful for carriers, many of whom have relied on higher long-term rates to make up for the loss-making spot rates that have been prevalent over recent months. The carriers’ Q1 financial reports detailed a decline in average freight rates, but with this latest XSI® drop the pressure will be escalating, especially for the carriers most exposed to the long-term market. The Global XSI® suffered its largest ever month-on-month drop in May, falling by 27.5% from April to hit 224.0 points. This is now the lowest Global XSI level since October 2021.