XSI® Global
The latest XSI® figures show the average of all valid long term contracts fell by 6.2% in January. At 148.0 points this is the lowest the XSI® has been since April 2021.
That has been a common question put to Xeneta by our customers in the past month in response to rapidly increasing spot rates due to the Red Sea crisis.
Let us tell you…
The latest XSI® figures show the average of all valid long term contracts fell by 6.2% in January.
At 148.0 points this is the lowest the XSI® has been since April 2021.
However, news of a drop in the XSI will be of little comfort to the many shippers who have been told some of their existing contracts will not be honored due to the Red Sea crisis.
A recent poll of Xeneta customers revealed almost two thirds are being forced into facing new surcharges or being pushed onto the FAK market.
With negotiations ongoing between shippers and suppliers on rates and applicable surcharges, only a minority have signed new long term rates in January.
The XSI® is the average of all long term rates in the market, therefore the index drop in January is more likely caused by the expiry of contracts signed back in Q4 2022 at higher rates rather than shippers putting pen to paper on agreements at lower rates in the past month.
Shippers will be reluctant to commit to long term rates during what is likely to be the height of the disruption caused by the Red Sea crisis.
The spot market development suggests rates on major trades affected by the Suez Canal diversion, such as Far East into Mediterranean and North Europe, will peak in early February.
However, this is a far from normal market.
