Xeneta, the Oslo-based ocean and air freight rate benchmarking and market analytics platform, said the news provides welcome relief for a segment that has been ‘up against the ropes’ for much of 2023, fighting against declining demand and volumes, married to escalating overcapacity and continuing economic uncertainty.

Spot rates are now back above long-term contracted rates on all three routes, giving shippers, freight forwarders and carriers much to ponder ahead of upcoming, peak season contract tenders.

Peter Sand, chief analyst at Xeneta, commented: “We’ve grown accustomed to witnessing a protracted downward trajectory for ocean freight rates since last summer, with spot rates falling below contracted rates on key routes as carriers fight for volumes in a climate defined by weak demand.

“GRIs have been deployed time and time again by the carriers to try and ‘right the ship’, arresting declines and allowing them to regain a sense of control. However, as we’ve seen across the majority of lanes this year, that’s failed to have the desired impact – until now.”

Xeneta’s real-time data, crowd-sourced from leading global shippers, showed that the August GRIs have helped rates rally on the crucial Far East to US West Coast, Far East to North Europe, and Far East to Mediterranean corridors.

The Far East to North Europe trade lane has experienced the most dramatic short-term climb (from the end of July), rising US$500 from a spot rate that has been sub-US$1500 per FEU since early May. This amounts to a 39.6% hike. This has also pushed the spread between this route and the more expensive Far East to Mediterranean lane down to just US$670 – the closest it’s been this year.

Meanwhile, the Far East to US West Coast corridor has enjoyed a somewhat steadier rise with more impactful GRIs over recent months. Market average spot rates here have climbed by 51.5% since the end of June, increasing by US$470 from 1 July to 1 August.

“With many carriers looking for GRI-driven increases in the range of US$1,000 per FEU, these ‘bumps’ fall far short but, given the recent industry context, will no doubt be welcomed by carriers nonetheless,” continued Sand.

“It’s also important to note that the climbs come ahead of peak season and a new wave of contract tendering. Of course, whether the increases hold in an atmosphere of weak fundamentals remains to be seen – they certainly haven’t done so earlier this year, but then we haven’t seen climbs as pronounced as this either.”

According to Sand, much will hinge on whether these short-term boosts translate into lasting gains and how that plays into the next set of GRIs in September.

“One thing’s for sure,” he noted, “many of the shippers who have been taking advantage of the weak short-term market and delaying signing new long-term contracts will be eyeing developments nervously. Have they left it ‘too late’ to negotiate? Has the market bottomed out before a rebound? Or is this simply a false dawn for carriers? Time, and analysis of the latest data, will tell.”