Carriers no longer care what's in the box - so long as its full: Xeneta
CONTAINER shipping lines no longer care what's in containers as they once did in establishing price, says Xeneta, an Oslo market intelligence.
"As long as the box isn't overweight - although even that isn't always an issue these days - or filled with hazardous material, the carriers just want a full box, period," said Xeneta CEO Patrik Berglund.
Xeneta says that oversupply, better supply chain management, and low fuel costs have made the market so competitive that 'what's in the box" no longer counts, reports Lloyd's Loading List.
The rate from Shanghai to Rotterdam, on a short-term contract, has fallen 78 per cent since mid-2014 to US$595 per FEU, the company noted.
This, Mr Berglund argues, has created a new market reality that has made almost irrelevant the type of cargo being transported.
"Traditionally cargo was rated by weight or measure, with the ratings based on the cargo type," Mr Berglund said.
"Calling a carrier or NVOCC's rate desks for ocean freight was a painful experience, with negotiations based on cargo descriptions, packing, and cube - all designed to bring maximum revenue to the carrier.
"It's also important to note how contracts can make a difference here. In the current market, short-term contracts, or those hunting good spot rates, are getting better deals than those with long-term contracts. This wasn't the case 18 months ago.
"Over the last 18 months slowdowns in the Chinese and EU economies have cut Chinese imports 19 per cent and exports by 13 per cent," said Mr Berglund.
CONTAINER shipping lines no longer care what's in containers as they once did in establishing price, says Xeneta, an Oslo market intelligence.
"As long as the box isn't overweight - although even that isn't always an issue these days - or filled with hazardous material, the carriers just want a full box, period," said Xeneta CEO Patrik Berglund.
Xeneta says that oversupply, better supply chain management, and low fuel costs have made the market so competitive that 'what's in the box" no longer counts, reports Lloyd's Loading List.
The rate from Shanghai to Rotterdam, on a short-term contract, has fallen 78 per cent since mid-2014 to US$595 per FEU, the company noted.
This, Mr Berglund argues, has created a new market reality that has made almost irrelevant the type of cargo being transported.
"Traditionally cargo was rated by weight or measure, with the ratings based on the cargo type," Mr Berglund said.
"Calling a carrier or NVOCC's rate desks for ocean freight was a painful experience, with negotiations based on cargo descriptions, packing, and cube - all designed to bring maximum revenue to the carrier.
"It's also important to note how contracts can make a difference here. In the current market, short-term contracts, or those hunting good spot rates, are getting better deals than those with long-term contracts. This wasn't the case 18 months ago.
"Over the last 18 months slowdowns in the Chinese and EU economies have cut Chinese imports 19 per cent and exports by 13 per cent," said Mr Berglund.