Contract box rates likely to dip as US negotiation season approaches

AD Ports' Khalifa Port

Oslo-based analyst, Xeneta, expects shippers to hold the whip hand when this year’s long-term container contract negotiations gather pace through April and May.

Latest figures from Xeneta show that global long-term ocean rates have fallen by 24% since their August 2022 peak. And although the latest drop in March was merely 0.5%, the firm’s CEO, Patrik Berglund, warns that this should not be seen as a sign of an improving market outlook.

“The principal reason for the relatively small decline is a lack of new contracts entering validity, rather than any strengthening of fundamentals,” according to Berglund. “The major tendering season in Europe has passed, whereas it’s looming large on the horizon for the US market. The prospects of carriers being able to maintain their current long-term rates here look slim, to say the least.”

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