According to Xeneta’s Shipping Index (XSI), long term contracted ocean freight rates jumped by 30.1% in May, the highest ever monthly increase. Price hikes in 2022 have reached 55%, leaving long term rates 150% higher than their year-ago level.
The price hike comes as new contracts, which typically run from May to April, came into effect. Long term ocean box rates were up 150% on-year in May 2022, after a record monthly jump in prices.
Xeneta CEO Patrik Berglund said that month-to-month predictions are difficult and mid- and long-term forecasts are near-impossible in the current market.
“Just last month we were looking at an 11% rise and questioning how such continued gains were possible. Now we see a monthly increase of almost a third blowing the previous XSI records out the water.
“The breath-taking gains reflect the sharp increase of the average of all valid long-term contracts, as older contracts, with lower rates, expire and are replaced by newer agreements with much higher rates. It’s certainly a challenging time to be a shipper.”
US import costs led the charge, up 65.1% in the month to a 205.4% increase on-year, while exports rose 9.9%. Asia import rates rose 17.4% to be 57.1% up on-year, while exports rose 35.4% on the month to be up 174.8% on-year. In Europe, long-term import rates rose by 11.3%, 122% on-year, while exports jumped by 27.6% on month to be 138.3% up on-year.
Xeneta listed regulatory investigations into carriers and Chain’s zero COVID policy and geopolitical upheaval as risks to the sector.
“The best advice we can offer, as ever,” said Berglund, “is to try and stay as strategically limber as possible, while always keeping up to date with the very latest industry intelligence. In a fast-moving market, that really is the only way to achieve the optimal value for your business and stakeholders.”