Following on from last month’s news, which reported a steep decline in global freight rates, Xeneta’s latest report has highlighted just how dramatically the ocean freight landscape in the Far East has changed over the course of a single year.
Figures show that spot rates have plummeted by an average of 75% across all six routes since January 2022, falling from historical highs in a total reversal of fortunes. By far the steepest decline is along the Far East to Northern Europe trade route, where spot rates have fallen by an average of 83%. This is in comparison to a decline of 24% on long-term rates.
Short Term Vs Long Term Rates
Long-term rates are proving more resilient than their short-term counterparts, showing an average fall of 13%.
According to Xeneta, in January last year, spot rates on some routes were around $2,000 per FEU higher than contracted rates, whereas they’re now $1,900 per FEU below long-term agreements, highlighting just how vast the gap between the two sets of rates has become.
In real terms, this means that shippers who are able to be flexible, can benefit hugely from accessing the short-term market and taking advantage of the significantly lower spot rates, whereas those who are locked into long-term contracts will be stuck paying more for the foreseeable future.
Far East Leads the Way
Not all routes have experienced long-term rate declines, which has increased the expanding gap between the different rate categories to truly phenomenal levels. In this, the Far East to US East Coast route leads the way, as its contract rates are currently 11% higher than they were this time last year, showing an unprecedented divide between spot rates and long-term freight rates.
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Here at Hawley Logistics, we continue to offer the same cost-effective and reliable logistical services to our customers. With over 35 years of experience in the logistics industry and a strong focus on UK distribution along with robust, extensive global networks, we’re able to offer our clients fast, reliable delivery services throughout Europe and beyond.
If you need global freight services, such as Sea Freight, Air Freight, Road Freight or UK haulage services, then don’t hesitate to get in touch with us today to discuss how we can help your business deliver. You can also call us on 01706 826322 or email info@hawleylogistics.co.uk. Alternatively, you can request a callback and one of the Hawley Logistics team will be in touch shortly to discuss your requirements.
