HIGH POINT – Contracted ocean freight rates have climbed for the third consecutive month in April, rising 11.1% globally to stand 109.9% year-over-year.
According to freight rate benchmarking firm Xeneta, the rise demonstrates how supply chain demand, successful carrier strategies and continued COVID disruption in China are coalescing to “pile on the pain” for shippers worldwide.
“Yet again we see the carrier community sitting pretty when it comes to long-term contracted rate negotiations,” said Xeneta CEO Patrik Berglund. “The data from our contributors is one indicator, while the financial performance of leading operators is another. They are, quite frankly, reaping huge rewards from a red-hot market.”
Berglund notes the latest financial results from COSCO subsidiary OOCL, which reported revenues of $5.16 billion for the quarter, up 71% year-over year. Profits were no less dramatic, with COSCO and OOCL reporting $3.3 billion in Q4 2021, while forecasts for Q1 2022 point to a figure of around $4.3 billion.
In the last week, Maersk also released its figures for the first three months of the year, showing revenues of $19.3 billion, with an underlying EBITDA of $9.2 billion, beating analyst expectations. It’s a position of power the carriers have no desire of relinquishing, as Berglund explains.
U.S. imports on Xeneta’s index rose by 9% in April, an all-time high for the index after fluctuating over the last few months. With this latest increase, the benchmark is now 109.7% higher than the equivalent period of 2021 and has risen by 18.7% since December 2021.
Robert Dalheim, senior editor of case goods and global sourcing, has been writing about the woodworking industry and business news since 2015. He is a graduate of Northern Illinois University with degrees in journalism and political science. Contact Bobby at rdalheim@furnituretoday.com or by calling (336) 605-3815.
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