We use cookies to provide you with a better experience. By continuing to browse the site you are agreeing to our use of cookies in accordance with our Cookie Policy.
  • INDUSTRY PRESS ROOM
  • ABOUT
  • CONTACT
  • MEDIA FILE
  • Create Account
  • Sign In
  • Sign Out
  • My Account
Free Newsletters
  • MAGAZINE
    • Current Issue
    • Archives
    • Digital Edition
    • Subscribe
    • Newsletters
    • Mobile Apps
  • TRANSPORTATION
  • MATERIAL HANDLING
  • TECHNOLOGY
  • LIFT TRUCKS
  • PODCAST ETC
    • Podcast
    • Webcasts
    • Blogs
      • One-Off Sound Off
      • Global Logistics and Risk
      • Empowering Your Performance Edge
      • Analytics & Big Data
      • Submit your blog post
    • Events
    • White Papers
    • Industry Press Room
      • Upload Your News
    • New Products
      • Upload Your Product News
    • Conference Guides
    • Conference Reports
    • Newsletters
    • Mobile Apps
  • DCV-TV
    • DCV-TV 1: News
    • DCV-TV 2: Case Studies
    • DCV-TV 3: Webcasts
    • DCV-TV 4: Viewer Contributed
    • DCV-TV 5: Solution Profiles
    • ProMat 2023
    • Upload Your Video
  • MAGAZINE
    • Current Issue
    • Archives
    • Digital Edition
    • Subscribe
    • Newsletters
    • Mobile Apps
  • TRANSPORTATION
  • MATERIAL HANDLING
  • TECHNOLOGY
  • LIFT TRUCKS
  • PODCAST ETC
    • Podcast
    • Webcasts
    • Blogs
      • One-Off Sound Off
      • Global Logistics and Risk
      • Empowering Your Performance Edge
      • Analytics & Big Data
      • Submit your blog post
    • Events
    • White Papers
    • Industry Press Room
      • Upload Your News
    • New Products
      • Upload Your Product News
    • Conference Guides
    • Conference Reports
    • Newsletters
    • Mobile Apps
  • DCV-TV
    • DCV-TV 1: News
    • DCV-TV 2: Case Studies
    • DCV-TV 3: Webcasts
    • DCV-TV 4: Viewer Contributed
    • DCV-TV 5: Solution Profiles
    • ProMat 2023
    • Upload Your Video
Home » Container ship operators hope for higher freight rates in 2020
newsworthy

Container ship operators hope for higher freight rates in 2020

December 30, 2019
DC Velocity Staff
No Comments

Container ship operators enjoyed a second straight month of increases in long-term contracted ocean freight rates in December, but the rise came after a year of steady decreases and lingering uncertainty about trade wars and the impact of "IMO 2020" fuel emission caps set to kick in on Wednesday.

Global ocean freight rates climbed by 0.9% in December across key trading routes, following a 0.9% rise in November, according to the latest XSI Public Indices report from Xeneta, the Oslo, Norway-based ocean freight rate benchmarking and market intelligence provider.

Despite that glimmer of good news, rates have been mired in declines for more than a year, with the exception of a spike in May, Xeneta said, based on real-time, crowd-sourced data collected from shippers.

In light of those conditions, Xeneta advised shippers to "delay procurement of new freight rates for as long as possible," sitting out the first quarter of 2020 and delaying negotiations over freight rates until they can gain a better view.

"It's clearly been another good month for the liner industry, but after the prolonged period of long-term contracted freight rates decline it was certainly needed!" Xeneta CEO Patrik Berglund said in a release. "The huge spike in May, when rates soared by 11.5%, was an anomaly, with prices continuing to fall away after that point. So, the moderate rise in November raised hopes that that established trend had been broken, and this increase seems to confirm that... for now." 

The market is wary of conditions in the new year thanks to an array of business, political, and economic developments, he said.

"Although the developments are almost universally positive, there are still key issues of concern for the industry. The trade war between the U.S. and China is an obvious one, but hostilities are somewhat 'on hold' at present...and there are other enduring factors creating uncertainty, like our 'old friend' Brexit for example," Berglund said. "However, a somewhat newer issue is emerging in relation to transparency, or the lack of it, on surcharging for the more expensive fuel needed to comply with the IMO 2020 Sulphur cap. This is fueling growing criticism and unease within the shipper community. Carriers need to address this."

The IMO 2020 regulations are a set of environmental standards issued by the International Maritime Organization (IMO) set to kick in Jan. 1. They are designed to curb air pollution by banning ships from using fuel with high sulfur contents. Since low-sulfur fuel is more expensive than traditional "bunker" fuel, container carriers are looking for alternatives. Options currently being tested by A.P. Møller - Maersk and CMA CGM include physical filters like smokestack scrubbers, as well as LEO fuel concentrated from paper mill waste, biofuel derived from cooking oil, and liquified natural gas (LNG).

Xeneta Shipping Index (XSI) Public Report: As the new low sulphur regulation looms, carriers and shippers are rambling. https://t.co/CBUfyUIJ5f

— Xeneta (@Xeneta_AS) December 23, 2019
Transportation Maritime & Ocean Business Management & Finance Green Logistics
KEYWORDS Xeneta
    • Related Articles

      Trucking index jumped again in February; higher freight rates seemingly on way

      Survey: owner-operators say freight rates and volumes plummet during pandemic

      Reports show continued freight strength, higher rates, tight trucks

    Recent Articles by DC Velocity Staff

    Manufacturing firms bemoan interest rates, talent shortage

    Median ransomware payment doubles to $26,000, Verizon says

    Schneider says California site can charge 32 battery-powered trucks at once

    You must login or register in order to post a comment.

    Report Abusive Comment

    Most Popular Articles

    • Union Pacific agrees to provide more predictable schedules for union rail workers

    • Schneider National opens innovation center at Wisconsin headquarters

    • Parcel carriers, shippers steer into choppy waters as a perfect storm of challenges approaches

    • Trucking companies face “modestly unfavorable” outlook heading into 2024

    • E-commerce 3PL gains $100 million funding for its network of Mexican warehouses

    Now Playing on DCV-TV

    Mason case study thumbnail ste dcvtv

    See How Mason Drives Continued Growth with Multiple Pack & Ship Automation Systems Consolidated Under One Roof

    DCV-TV 4: Viewer Contributed
    We sat down with Craig Ritzinger, Facilities Manager, Mason Companies, to hear how the companies' continued growth and expansion has required innovations in warehouse fulfillment over time. Mason worked with StreamTech to implement a new fulfillment system for one of their brands, as well as bringing the other...

    FEATURED WHITE PAPERS

    • How to Use Economic Uncertainty to Gain Competitive Ground with Automation

    • Exploring Customized Forklift Solutions

    • Exploring the Future of Labor Management With Capacity Planning

    • Three layers of forklift safety: Promoting operating best practices

    View More

    Subscribe to DC Velocity Magazine

    GET YOUR FREE SUBSCRIPTION
    • SUBSCRIBE
    • NEWSLETTERS
    • ADVERTISING
    • CUSTOMER CARE
    • CONTACT
    • ABOUT
    • STAFF
    • PRIVACY POLICY

    Copyright ©2023. All Rights ReservedDesign, CMS, Hosting & Web Development :: ePublishing