Ocean freight container carriers are treading a fine line between risk and reward during new contract negotiations as the market remains gripped by uncertainty in the Red Sea, according to new data on the Xeneta Shipping Index (XSI).

The latest data released by ocean and air freight rate benchmarking and market analytics platform Xeneta shows the global XSI (the average rate of all valid long term contracts in the market) remained fairly flat in April at 154.3 points, up by just 1.7 per cent from March.

The XSI for European imports reached 171.8 points in April—up by 9.2 per cent from March and its biggest month-on-month (MoM) increase since June 2022, mainly due to the ongoing impact of conflict in the Red Sea.

However, the XSI sub-indices for US imports fell by 9.4 per cent MoM and by 67 per cent year on year (YoY) in April to 150.6 points. And, while April’s global XSI figure represents a slight MoM uptick, it is still down by 50.1 per cent YoY.

“The case for higher long term rates is strengthened by a 10.7 per cent increase in global container volumes in January and February compared to the first two months of 2023,” said Xeneta senior shipping analyst Emily Stausboll in a release from the Norway-based company.

Even the European imports XSI sub-index, which registered strong MoM growth in April, is down by 34.2 per cent compared to a year ago.

The XSI for Far East exports increased by 5.6 per cent in April. This follows the 13 per cent increase in February and sees the index stand at a seven-month high of 160.1 points. However, despite this MoM increase, this index less than half the level it was in April last year.

The index for Far East imports registered its third consecutive MoM increase in April, rising by 6.9 per cent to 124.8 points.

Fibre2Fashion News Desk (DS)

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