Xeneta: What’s in the Box No Longer Important

first_imgzoom An oversupply in a declining container shipping market, coupled with better supply chain management and downwardly spiralling fuel costs have made the market so competitive over the last 18 months that containership carriers are no longer pricing cargo according to type, the market intelligence platform for containerized ocean freight Xeneta said.“What’s in the box” no longer plays a part in negotiations as the current number one priority is simply filling the vessels.“Traditionally cargo was rated by weight or measure, with the ratings based on the cargo type…But now, as long as the box isn’t overweight – although even that isn’t always an issue these days – or filled with hazardous material, that’s all been pushed to the side. The carriers just want a full box, period,” Xeneta CEO, Patrik Berglund, said.The cause of such a shift seems to lie in the oversupply factor in a declining market as the slowdown in the Chinese and EU economies have cut Chinese imports by 19 percent and exports by 13 percent over the last 18 months, while 208 new ships were introduced to the market in 2015, boasting a capacity of 1.67 million TEUs and pushing the oversupply mark to 8.1 percent of TEUs, Berglund said.“The industry is in a state of flux,” he said. “Cosco and CSCL are looking to get their recent merger approved by EU and US regulators and, together with Evergreen, OOCL and CMA CGM, form a new east-west mega-alliance. Such a powerful grouping would challenge the market dominance of the Maersk and MSC 2M vessel-sharing agreement, and possibly drive the price war to new highs, or rather lows.“In this environment there’s rumours of rock bottom prices, with mentions of boxes booked for Qingdao – Rotterdam for as low as USD 100, or even lower. So, at present, ‘what’s in the box’ isn’t the question, it’s ‘can we have your business please’?”According to Xeneta, the market average price for transporting a 40-foot container from Shanghai to Rotterdam, on a short-term contract, has slumped dramatically since mid-2014.As of April 19, 2016, the market average price stood at USD 595 (a 78 percent drop compared to July 1, 2014) and at USD 321 for the market low (an 82 percent drop over the same period).last_img

Leave a Reply

(*) Required, Your email will not be published