New data from box pricing platform Xeneta shows that long-term rates on deals in New Zealand and Australia have “skyrocketed”, with some contracts up more than 400 per cent since 2019.
The latest figures highlight the sharp rise in long-term sea freight costs into Australasia, with prices on all major routes more than double what they were at the same time last year. Meanwhile, Peter Sand, principal analyst at Xeneta, said the growth since July 2019 could “rewrite the industry record”.
“The global container shipping market is in overdrive, making shippers very miserable and increasing our leading carriers’ huge profits,” Sand commented. “This is most evident in major trade from China, Southeast Asia and Northern Europe to Australia and New Zealand.
“While the data on our platform shows that average rates for long-term agreements have stabilized in recent months, the fact that they are replacing older agreements at much lower levels means that average rates for all valid contracts have been pushed through the roof for many already cash-strapped shippers.”
While imports fell in the first five months of the year — 7.6 percent in Australia and 13.5 percent in New Zealand — they remain historically high, according to Xeneta. The largest trade into the region from the Far East illustrates this, with an average long-term exchange rate of $7,600 per FEU on July 1. That’s more than double the number in July 2021 and 375 percent higher than in July 2019.
The biggest increase, however, has been in agreements from Southeast Asia, which have increased by more than 420% since the summer of 2019 to $7,800 per FEU and $6,300 over the past three years. In the last year alone, the average price for long-term contracts has soared by nearly $5,000 / FEu, making it the corridor with the largest annual increase.
Finally, long-term rates in Northern Europe, the most expensive of the major deals — and the only one above $8,000 per FEU — are up 160% since Last July. This is despite the fact that sales here fell 4.2% year-on-year in the first five months of 2022.
“It’s tough, from what we can see here, especially for shippers who are looking at these key Australian markets,” Sand concluded.