Shipping lines want to increase long-term rates, but fear of excess capacity is holding them back.
The container shipping market is experiencing significant changes due to instability in the Red Sea and the Suez Canal. Shipping lines are adjusting their route strategies to avoid the risks associated with these corridors, opting to divert their vessels around the Cape of Good Hope. While this measure ensures greater navigation safety, it has resulted in an increase in freight rates due to extended routes and the need to maintain weekly schedules.
Although spot rates have remained relatively stable in recent weeks, long-term contract rates are experiencing a more dynamic and challenging situation. Negotiations for new contracts are marked by uncertainty generated by the situation in the Red Sea, leading shipping lines to make cautious decisions. While there is pressure from shipping companies to increase long-term rates, there is also a latent fear of excess capacity in a volatile and changing market.
Recent data from the Xeneta Shipping Index (XSI) reveal that while average contract rates have remained relatively stable, there are significant regional disparities. While rates for European imports have experienced a notable increase, rates for US imports have shown a downward trend. This scenario reflects the complexity of negotiations and the need for shipping lines to balance risk and reward in an unpredictable business environment.
Emily Stausboll, senior shipping analyst at Xeneta, highlights the delicate situation shipping lines find themselves in. While there is a desire to secure higher long-term rates, it is also crucial to ensure consistent cargo volumes. This delicate balance reflects the challenges facing shipping companies in navigating a market characterized by uncertainty and volatility.
To read the full article: https://www.mundomaritimo.cl/noticias/lineas-navieras-desean-incrementar-las-tarifas-de-largo-plazo-pero-temor-al-exceso-de-capacidad-las-detiene