Long-term rates for reefer containers from the US West Coast to the Far East are at their "highest ever level" according to a recent report from Xeneta.
A recent report by Xeneta showed that long-term contract prices for refrigerated containers from the West Coast of the United States to the Far East are at "the highest level ever seen."
The ocean and air freight rate benchmarking and market intelligence platform said the average rate for all valid contracts stands at US$5,850 per 40' reefer on May 15.
The Maritime and Air Freight Rate Benchmark and Market Intelligence Platform said the average freight rate for all valid contracts was $5,850 per 40-foot reefer on May 15.
Long term rates rose nearly by US$2,000 in April, as last year's long term contracts ran out and were replaced by higher rates on long term contracts covering the next twelve months, it added.
The company added that the long-term contract price rose nearly $2,000 in April this year, which directly led to the fact that last year's long-term contract price will have to use higher prices to operate in the next 12 months after the expiration of last year's long-term contract price.
Xeneta said the vast majority of long term contracts on this trade last 12 months, the majority of which run from the start of April to the end of the following March.
Xeneta said the vast majority of long-term contracts for the deal lasted 12 months, with most of them from early April to the end of March.
It added that the average rate for 12-month contracts running from Q2 2022 to the end of Q1 2023 is US$5,945 per 40' reefer, up by almost 60% from the 12-month contracts which ended on March 31 last year.
The company added that the average rate for a 12-month contract from the second quarter of 2022 to the end of the first quarter of 2023 was $5,945 per 40-foot reefer, up nearly 60 percent from the 12-month contract that ended on March 31 last year.
"In contrast to what we have seen on many of the major dry trades, signing a 12-month contract on this reefer trade doesn't offer a discount compared to a 3-month contract," Peter Sand, chief analyst, Xeneta said, noting that of the contracts starting in April this year, the average rate for contracts with a 3-month validity is more than US$2,000 per container, cheaper than the average rate for contracts lasting 12 months.
Peter Sand, principal analyst at Xeneta, said: "Unlike what we have seen in many of the major dry goods trades, there is no discount compared to signing a 12-month cold storage trade contract compared to signing a 3-month contract. He noted that in contracts that began in April this year, the average rate for a contract with a validity period of 3 months was more than $2,000 per container, lower than the average price of a 12-month contract.
"The long-term rates being signed are considerably higher than current rates on the spot market, which have, in fact, never been as high as long-term rates are currently," Sand added.
Sand added: "The long-term interest rates being signed are much higher than the current rates in the spot market, and in fact, the interest rates in the spot market have never been as high as the current long-term rates. ”。
Xeneta noted in the report that on May 14, the spot rate for a reefer container from the US West Coast to the Far East was US$5,050, flat since the start of the year and almost US$900 lower than the average rate for long term contracts from the past three months.
Xeneta noted in the report that on May 14, the spot price of refrigerated containers from the U.S. West Coast to the Far East was $5,050, unchanged from the beginning of the year and almost $900 below the average price of long-term contracts over the past three months.
However, the market intelligence platform noted that as the spot market develops, most shippers on the long term market will be paying these high rates until it comes to looking at contracts starting in Q2 2023.
However, the market intelligence platform notes that as the spot market evolves, most shippers in the long-term market will pay these high rates until the second quarter of 2023 begins to consider the start of a new contract.
"The higher rates come despite a very poor start to the year in terms of export volumes," Xeneta said.
Xeneta said: "Although the volume of exports at the beginning of the year was very bad, the market price remained high. ”
In the first quarter of 2022, the number of reefer containers exported from the US West Coast to the Far East was down 37%.
In the first quarter of 2022, the number of refrigerated containers exported from the U.S. West Coast to the Far East actually fell by 37 percent.
On the long-term market, Xeneta said rates for reefers are US$4,300 more expensive than dry containers, while on the spot market, the premium stands at US$3,850 on May 14.
Xeneta said that in the long-term market, the price of refrigerated containers is $4300 higher than dry containers, while in the spot market, the premium on May 14 is $3850.
Xeneta noted that a year ago, the difference between dry and reefer containers was US$2,500 on both the long and short-term markets.
A year ago, Xeneta noted that the difference between dry and refrigerated containers in the long- and short-term market was only $2,500.
(Xeneta: is the creator of the world's largest sea and air freight benchmarking and market analysis platform registered in Norway.) ）
Translation: Exam56 Logistics Freight Forwarder - Industry News, Exam Learning, Interactive Communication