Analysis of Q3 container shipping costs reveals positive trends for the beleaguered container carrier segment, according to Xeneta. However, the market remains highly complex and unpredictable, with the ‘Hanjin Effect’ already ebbing away.
According to Xeneta, which crowd sources shipping data from more than 600 major international businesses, covering more than 60,000 port-to-port pairings and over 17 million contracted rates, the recent collapse of Hanjin laid the foundations for a trading period like no other.
Patrik Berglund, CEO of Xeneta, said: “It was certainly a stand-out quarter… Short-term rates on the world’s number one trade route – Far East Asia to North American main ports – sky-rocketed, largely due to Hanjin transforming oversupply to undersupply almost overnight,
“This enabled significant rate hikes, with the market average price for 40’ containers climbing by 47% across Q3, starting at US$1,240 and ending on $1,826.
“However, looking at today’s data we can already see that prices are trending down somewhat, meaning the Hanjin Effect is history. There is clearly still an issue of structural overcapacity, albeit more balanced now, and that pushes prices down – with risks for both the carriers and BCOs/shippers. Short term rates on the number two route – Far East Asia to North Europe – actually fell by 24% in Q3.
“That said, this is more of a stabilisation, or flattening out, as it should be seen in the context of a longer-term climb. Market averages for 40ft containers hit a low of $662 in April and had risen to $1500 by the close of September on this route. So, the fall isn’t as serious for carriers as it may seem. However, if it continues that’s another matter. That could bode for a very challenging 2017 for carriers and, therefore, a risky time for shippers who must have predictability in their supply chains.”
Berglund adds the caveat that it’s “too early” to accurately predict the market for 2017 though, citing the unpredictability of a segment that changes almost daily.