{"id":101306,"date":"2023-12-04T15:00:02","date_gmt":"2023-12-04T08:00:02","guid":{"rendered":"https:\/\/advantage.vn\/?p=101306"},"modified":"2023-12-04T15:00:02","modified_gmt":"2023-12-04T08:00:02","slug":"xeneta-expects-even-more-brutal-2024-for-ocean-carriers","status":"publish","type":"post","link":"https:\/\/advantage.vn\/en\/xeneta-expects-even-more-brutal-2024-for-ocean-carriers\/","title":{"rendered":"Xeneta expects \u201ceven more brutal\u201d 2024 for ocean carriers"},"content":{"rendered":"

Norway-based ocean and air freight rate platform suggests that next year could be “even more brutal than expected” for ocean carriers in the freight market.<\/strong><\/p>\n

The Xeneta Shipping Index (XSI\u00ae) tracks real-time developments in global long-term contracted rates and figures released on 30 November show it fell by a further 4.7% in October. The XSI\u00ae now stands at 158.5 points, which is 62.3% lower than November 2022.<\/p>\n

Emily Stausb\u00f8ll, Xeneta market analyst, believes this latest development is an ominous sign for carriers. “The XSI\u00ae is an average of all long term contracts on the market \u2013 so, in essence, the global index is currently being propped up by those older contracts which were signed back in 2022 when rates were much higher,” she said. “These older contracts with higher rates should have afforded some financial insulation throughout 2023, however we have still seen four of the major carriers post big financial losses in Q3.”<\/p>\n

\"chart-courtesy-xeneta\"<\/p>\n

Stausb\u00f8ll stated the situation will get even worse as we enter the next year. She believes that those older contracts will largely be replaced in the early part of 2024 and carriers will be left exposed to the current weak market.<\/p>\n

“We can be absolutely certain the new contracts will be signed at much lower rates than those signed at this time last year, so if carriers are already reporting losses, what are they going to be next year? We could be talking about extremely big numbers,” wonders Stausb\u00f8ll.<\/p>\n

Xeneta market analyst pointed to Maersk\u2019s loss of EBIT US$27 million in the third quarter as a particularly significant development in light of the latest XSI\u00ae figures. She commented, “Maersk relies heavily on the long term market so they should have been less impacted by the collapse in spot rates during 2023.<\/p>\n

“The fact they still posted a loss in Q3 suggests there could be serious problems down the line when the XSI\u00ae drops further next year.<\/p>\n

“We always knew there was a storm coming in Q1 2024 when the older contracts expired, but it seems as though it has arrived earlier than expected.”<\/p>\n

\"containership\"<\/p>\n

While the XSI\u00ae is down from the same period in 2022, long term rates remain up by 39.5% compared to November 2020, according to Xeneta.<\/p>\n

Stausb\u00f8ll concluded, “Long terms rates are solid compared to pre-pandemic, but this still hasn\u2019t been enough for some of the biggest ocean liner shipping companies to deliver a positive operating margin in Q3 this year. The only way carriers can hope to avoid catastrophic financial losses in 2024 will be through capacity management, but it will be extremely tough to achieve.”<\/p>\n

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