However, the latest Xeneta Shipping Index (XSI), which crowd-sources real-time data from the world’s leading shippers, also shows that today’s valid long-term agreements stand 112% higher than this time last year, and a massive 280% up against July 2019.

 “The carriers have enjoyed staggering rates rises, driven by strong demand, a lack of equipment, congestion and COVID uncertainty, for 17 of the last 19 months,” comments Xeneta CEO Patrik Berglund. “July has seen yet more upticks across the board, but the signs are clear there is a ‘shift’ in sentiment as some fundamentals evolve.”

Explaining, he notes that July’s increases are the slowest since January, with upward pressure on long-term agreements easing as spot rates fall across major trades. In addition, volumes on many corridors are down, with, for example, containerized European imports falling by 3%, and exports 6%, in the first five months of 2022.

 “So, indications are there that we may have reached a peak and that prices of new agreements are more likely to hold than suddenly leap up again, as we’ve become accustomed to seeing of late,” he says. “However, that’s probably of little comfort to shippers that have been continually battered by a market in overdrive and now see prices stabilizing at historically high levels.

“That said, nothing is certain. US and European ports are still congested, industrial action on the logistics chain is spreading globally and, of course, we still have the threat of COVID and its impact on economic activity, particularly in China. There’s a lot of variables at play, so it’s imperative to stay tuned to the latest intelligence when negotiating long-term contracts to achieve a competitive edge.”

In a further point, Xeneta says that it ran a survey of its customer base in July and found that many were now looking to renegotiate contracted rates given the recent spot market drops.

Berglund said: “Our customers, mainly large volume shippers, now find themselves in a stronger negotiating position. Our survey showed that 44% no longer feel confident in the stability of long-term contracts – of that 44%, some 22% said they were more likely to allocate lower volumes only to cheaper contracts, while 22% preferred to move allocation to the spot market as soon as prices dip below long-term rates. It’s going to be an interesting few months ahead.”