Ocean freight rates has plummeted from peaks across European export trades, according to the latest analysis by Xeneta.

The ocean and air freight rate benchmarking and market analytics platform said on May 11 that the cost of shipping containers out of Europe has plummeted from the peak prices of 2021 and 2022, with spot rates on the main corridors down by close to 70%.

However, it noted that according to the latest data from Oslo-based Xeneta, some trade lanes are still capable of commanding prices far above pre-pandemic levels, with recent long-term contracts on selected corridors over 100% more expensive than 2019 equivalents.

Xeneta crowd sources real time rates data from leading global shippers, allowing it to assess the very latest market moves.

It noted, however, that unsurprisingly, given current sentiment, Xeneta's European export intelligence shows both spot and long-term ocean freight rates have collapsed compared to the historical highs recorded in the space of the last year to eighteen months.

Rates fall across the board

"All arrows are pointing down, with dramatic falls across the board," said Peter Sand, chief analyst, Xeneta, when referring to prices on the five main European export trades (to the Mediterranean, Far East, Middle East, US East Coast, and South American East Coast).

"The biggest lanes are also the biggest losers, with the front haul Far East corridor down 69% year-on-year."

Sand added that spot prices for the Far East trade are now just under US$600 per FEU, equivalent to 18% below the pre-pandemic average of 2019.

Meanwhile, it added that the US East Coast route has experienced the sharpest decline in absolute dollar terms, with prices now a staggering US$6,000 per FEU lower than their peak in mid-May 2022.

"As of early May spot prices on this recently very strong trade stood at US$2 745 per FEU," the Xeneta chief analyst said.

He added that long-term contract developments in the region are, on the whole, "equally depressing for carriers," with agreements signed within the last three months down an average of 45% against peak prices.

The falls range from a 26% decline on the Middle East bound trade, to a fall of 59% on the short haul to the Mediterranean, Sand said.

Despite the apparent weakness of the market, he highlighted the complexity behind the headline collapse, with a range of individual trends emerging across the corridors.

The Xeneta chief analyst said starting with the spot rates he points out that the Far East corridor is the only trade where rates are currently below 2019 levels.

By contrast, exports to the South American East Coast are currently 96% more expensive than they were in 2019, while rates to the Middle East are 47% up for the same period.

"And this is despite respective falls on the corridors of 43% and 40% from peak prices," Sand said. "So, the question arises, does this point to relative strength, or the capacity for further heavy falls in the months to come?"

On the long-term market, the scale of the drops can, Sand emphasizes, distract stakeholders from the size of the gains recorded throughout the pandemic — which is particularly evident on two key trades.

"Here we see rates in early May up more than 100% against 2019 levels. The trans-Atlantic front haul to US East Coast is a commanding 114% up, while the smaller, yet still essential, trade into the South American East Coast also shows triple digit growth, up 111% for the same period.

"In fact, the only trade with long-term rates significantly below 2019 levels is the shortest of them all, to the Mediterranean. Here we see rates down 38% since 2019 (and 59% since their peak in mid-August 2021), with current prices at US$524 per FEU," Sand added.

Sand concluded that the rollercoaster rates ride will be "a natural focus" for logistics professionals attending the main Munich shows Transport Logistic 2023 and Air Cargo Europe 2023 this week, but warns against oversimplifying current developments.

"There's real value to be unlocked in diving down into the data for individual corridors," he said.

"There's never a 'one size fits all' trend in this market, and current developments in European exports make that very clear," the Xeneta chief analyst added.