XSI® Far East
Another month of record-high exports
November has brought a 2.6% drop in the XSI® for Far East exports, leaving it at 148.9 points. The average cost of shipping a container out of the Far East on the long term market is now 17.7% higher than November 2022.
While the XSI® has fallen, another month of record-high exports out of the Far East has brought accumulated year-to-date volumes into positive territory for the first time this year when compared to 2022.
The 5.3m TEU exported from the Far East in September was an increase of 28.9% from the same month in 2022.
For many shippers, the New Year brings the start of new long term contracts, and the big question is just how far the XSI® will fall.
The answer could be found on the Xeneta XSI® by looking at the spread between the spot rates being agreed today and the average of all valid long term contracts.
The four biggest deep-sea trades in terms of volume all come out of the Far East. Of these trades, the biggest difference is found on the trade into North Europe where the current spot rate is two thirds of the long term market.
The narrowest spread is between the Far East and US West Coast where the spot market is just 5.8% lower than the average of all valid long term contracts.
Shippers should be keeping a keen eye on today’s spot rates and the recent developments in the long term market to gain the best insight on where the market may be headed in 2024.
For example, Q1 is typically the time shippers enter negotiations for new long term contracts into the US. They will be looking at Xeneta data and intelligence in the hope the spot market will weaken and offer bigger savings next year than today’s spread may suggest.
Imports into the Far East have dropped 3.5% on the XSI® cementing its place as the lowest scoring sub index. It now sits at 105.0 on the index, which is just 5% higher than the XSI® baseline in January 2017.
This index is based entirely on backhaul trades, with carriers finding great difficulty in pushing any rate increases through. This is demonstrated in the fact all trades that make up Far East imports index are down compared to a year ago.
The smallest year-on-year decrease in Far East imports is found from the US West Coast to South East Asia, which is down 7.5%.
The biggest drop in Far East imports is on the North Europe to China trade. This trade has a heavy weighting on the overall XSI® and fell by 95% compared to a year ago. It now sits at USD 34 per FEU, excluding terminal handling charges.
