The global XSI® index saw its first month-on-month fall since January 2022 as it slid to 448.3 in September, falling by 1.1%. ▶︎ Global Index ▶︎ Far East Indices (Import/Export) ▶︎ Europe Indices (Import/Export) ▶︎ US Indices (Import/Export)
The global XSI® index saw its first month-on-month fall since January 2022 as it slid to 448.3 in September, falling by 1.1%.
In September, spot rates on many trades fell by their largest margin yet as lower global demand and easing global congestion saw shippers gain a decisive advantage.
These large drops in the spot market have not yet significantly impacted the long-term contract rates, as evidenced by this tempered 1.1% month-on-month decline.
Lower rates for new contracts and shippers' success in renegotiating the freight rates of older longer-term contracts in exchange for delivering more volumes to their carriers are other reasons behind the first drop in all the valid long-term contract rates since January.
Expect the month-on-month decline to continue and likely to pick up the pace as the spread between the long and short market has now reached record-high levels on many trades, and the XSI® index is still 112% higher than it was in September 2021. Over the same time, spot rates on major trades are down by between 15 and 35%.
The index for European imports fell to 388.5 index points in September, down by 1.7% from August.
This slight fall has not been able to affect, in any meaningful way yet, the year-on-year increase shippers are seeing on their long-term contracts, which is still up by 123.7% from September 2021.
When it comes to loaded container volumes, European imports were down by 3.3% in the first seven months of 2022. In fact, there has been no month this year that has seen higher European imports than in the corresponding year in 2021, according to CTS.
The XSI® subindex for European exports also fell by just 0.1% from August, falling to 447.4 index points in September.
It is now 75.5% higher than a year ago.
Another strike has hit Port of Felixstowe – the largest in the UK, coinciding with the worker strike at the Port of Liverpool.
However, carriers can find alternatives this time around as falling volumes and lower capacity sailing into Europe have made it easier to accommodate schedule changes ahead of the strike as alternative ports in the region are less congested.
In line with the fall in the sub-indices for Europe and US imports, the XSI® subindex for Far East Exports has fallen by 1.2% month-on-month, down to 627.3 points.
September is the first month since April that the index is less than twice as high as it was in January 2022 and is now up by 93.6% since the start of the year.
Despite increasing blanked sailings, big drops have appeared in the spot rates out of the Far East as the lower capacity has been unable to stop an acceleration in the decline of spot rates.
With carriers now competing for volumes, new long-term deals will also start to fall as we enter Q4.
The index with the biggest month-on-month decline in September is that for Far East Imports. This XSI® index fell by 3.0% month-on-month to 223.2 points.
Volumes into the Far East have fallen more than volumes out of the region, with the former down by 8.5% compared to a 1.4% drop in the latter.
The XSI® index for US imports followed the global trend, though it fell slightly less, down by 0.7% month on month to 561.7 points in September.
Compared to September 2021, the index is still up by 179.7%. This is despite spot rates on the major trades into the US from the Far East now down from their levels at this time last year.
In contrast to the other XSI® sub-indexes, the US export index grew month on month in September by 0.3% to hit 151.2 points in September, its highest level yet, as the average exporter from the US is still seeing higher long-term rates than previously.
It is, however, unlikely to keep growing as the global long-term market softens.
