XENETA's Long-Term XSI Public Indices revealed another monthly hike in long-term ocean freight rates, with global container prices climbing 3.2 per cent, according to its press release.
The development follows a 2.2 per cent increase in August and a 28.1 per cent jump in July, leaving rates now standing 91.5 per cent up year-on-year.
Also, there is little evidence to suggest a weakening of market fundamentals, according to Oslo-based Xeneta.
'This year has seen a unique convergence of Covid-19 disruption, port congestion, strong demand, and maxed-out capacity, and that has stoked the flames of record-breaking rates,' explains Xeneta CEO Patrik Berglund.
'The global supply chain is under immense pressure and desperate shippers have no choice but to pay up to secure deliveries, or at least try to, ahead of key trading periods such as Christmas. It's a crazy market out there,' said Mr Berglund.
Mr Berglund highlighted how Maersk recently upgraded its EBITDA estimates from US$8.5 to $10.5 billion to $22 to $23 billion, stating shippers are trying new strategies to circumvent one-sided negotiations and take control.
'This year we've seen the emergence of larger retailers chartering their own vessels to ensure both reliability in the supply chain and a degree of cost control,' said Mr Berglund.
'September saw yet another major shipper resort to what some see as a drastic measure, with the John Lewis Partnership partnering with an as yet unnamed freight forwarder to take on its own ships. This is a direct response to a market in overdrive, but one wonders if this type of approach could signify a new way of working, in the long-term, for shippers sick of being held to ransom,' said Mr Berglund.
A seven to eight per cent growth in global container volume is anticipated.
'Shippers are treading carefully in this regard, but there is some appetite for longer-term commitment - raising the question of whether both parties might look beyond the traditional tender,' said Mr Berglund.
'Another change of approach is exemplified by CMA CGM's bold, recent move to freeze spot rate increases from now through to February. However, with rates already so high there'll no doubt be many shippers viewing this as 'crumbs from the rich man's table'?? and let's see if any freezes do take hold within the broader carrier community,' said Mr Berglund.
'One thing is certain though; something has to be done. Current carrier profitability levels are not sustainable, nor are they in the carriers' long-term interests. With such high profits, the seed is sown for challenges to the status quo, with new industry entrants or more direct cargo owner action, such as chartering. The carriers simply don't want that,' said Mr Berglund.
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The development follows a 2.2 per cent increase in August and a 28.1 per cent jump in July, leaving rates now standing 91.5 per cent up year-on-year.
Also, there is little evidence to suggest a weakening of market fundamentals, according to Oslo-based Xeneta.
'This year has seen a unique convergence of Covid-19 disruption, port congestion, strong demand, and maxed-out capacity, and that has stoked the flames of record-breaking rates,' explains Xeneta CEO Patrik Berglund.
'The global supply chain is under immense pressure and desperate shippers have no choice but to pay up to secure deliveries, or at least try to, ahead of key trading periods such as Christmas. It's a crazy market out there,' said Mr Berglund.
Mr Berglund highlighted how Maersk recently upgraded its EBITDA estimates from US$8.5 to $10.5 billion to $22 to $23 billion, stating shippers are trying new strategies to circumvent one-sided negotiations and take control.
'This year we've seen the emergence of larger retailers chartering their own vessels to ensure both reliability in the supply chain and a degree of cost control,' said Mr Berglund.
'September saw yet another major shipper resort to what some see as a drastic measure, with the John Lewis Partnership partnering with an as yet unnamed freight forwarder to take on its own ships. This is a direct response to a market in overdrive, but one wonders if this type of approach could signify a new way of working, in the long-term, for shippers sick of being held to ransom,' said Mr Berglund.
A seven to eight per cent growth in global container volume is anticipated.
'Shippers are treading carefully in this regard, but there is some appetite for longer-term commitment - raising the question of whether both parties might look beyond the traditional tender,' said Mr Berglund.
'Another change of approach is exemplified by CMA CGM's bold, recent move to freeze spot rate increases from now through to February. However, with rates already so high there'll no doubt be many shippers viewing this as 'crumbs from the rich man's table'?? and let's see if any freezes do take hold within the broader carrier community,' said Mr Berglund.
'One thing is certain though; something has to be done. Current carrier profitability levels are not sustainable, nor are they in the carriers' long-term interests. With such high profits, the seed is sown for challenges to the status quo, with new industry entrants or more direct cargo owner action, such as chartering. The carriers simply don't want that,' said Mr Berglund.
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