2022 shipping contracts to see new highs: Xeneta

Most of the 2022 shipping contracts will be at record-high levels, Xeneta data show. 

"As carriers reap the benefit of a great year so far, shippers are still looking to bring predictability and stability to their supply chain," Xeneta, an ocean and air freight rate benchmarking and market analytics platform, said in its latest update.

Data for four trades show bids coming up in three main price brackets: 

• Lowest bids are being offered by some carriers but require shippers to agree to either extended contract periods or wider logistics agreements. 

• Middle range is the more traditional carrier offers; and 

• The highest prices are from freight forwarders though they are also offering some shippers competitive rates compared to traditional carrier offerings. 

“For shippers, the question has to be, are there any real alternatives to agreeing to these record-high rates? Or are they at the mercy of carriers who are enjoying their current position of power?,” asks Peter Sand, Chief Analyst, Xeneta. 

Sand adds: “Given these higher prices, shippers deserve much better service. This includes containers arriving within a reasonable time at the desired port and at the agreed price.” 

The China-US trade is in a much earlier tender process stage but early indications show average bids of $5,700/FEU. 

On China-North Europe trade, the average of the bids is $11, 900/FEU, a considerable increase for all shippers compared to long-term contracts signed in 2021. 

"Though the absolute level of the long-term rates coming in may leave you gobsmacked, the fact that they follow the spot market should come as no surprise as the long- and short-term markets are correlated. While it may be tempting to go for the lowest price offered, differences in what is being offered mean the implications on the wider supply chain should be considered with no one-size-fits-all solution,” Sand added.

The much-tracked Drewry’s composite World Container Index increased marginally to $9,292.39 per 40ft container and remains 169 percent higher than a year ago.

The average composite index of the WCI, assessed by Drewry for year-to-date, is $7,520/40ft container, which is $4,751 higher than the five-year average of $2,769/40ft container.

Drewry is expecting rates to remain steady in the coming week.