Long-term ocean freight contract rates for China-north Europe capacity in June are up around 64% compared with the same period last year, according to new data from Xeneta.

The containerised ocean freight benchmarking specialist said ocean freight contract negotiations for the China Main-North Europe corridor were now ¡°moving along¡±, following delays in the negotiations late last year and early this year, as beneficial cargo owners (BCOs) ¡°sat cautiously back to see how the market would develop¡±.

With the market seemingly recovering after a rally in the fourth quarter of 2016, carriers still remain more or less ¡°in the driver¡¯s seat¡±, Xeneta said, noting: ¡°The much-anticipated Chinese New year did not do too much to crash prices significantly. Negotiations are now on their way or coming to a conclusion for Asia-Europe.¡±

The rates specialist said that long-term contract data was continuing to populate the Xeneta platform, but it now had future long-term rates data for June 2017 on the key China Main-North Europe corridor based on over 1,500 contracted rates from global large-volume shippers who have signed long-term contracts with suppliers in the past three months.

¡°If we slice out the data for long-term contracts negotiated in the past three months only, the increase on the market average price comparing Mid-June 2016 to Mid-June 2017 is telling,¡± Xeneta said, with the market average price up 64% year on year for 40 ft containers from China main ports to north Europe main ports.

¡°We receive daily updates from our customers and will have more data points as more and more negotiations conclude this month,¡± said chief marketing officer Katherine Barrios. Meanwhile, contract negotiations for North American companies will soon begin, and the transpacific market will, therefore, soon be in the spotlight.

But although the overall containerised global ocean freight market seems on a recovery path, Xeneta believes it is still unpredictable for a number of reasons, including the fact that demand is still relatively low, although there are reports that demand is increasing. ¡°I am not too sure where to place my bet yet,¡± said Barrios. ¡°In any case, one thing that is sure is that economic and political situations affecting demand are currently unpredictable.¡±

Other factors contributing to the unpredictability include overcapacity, with Xeneta noting that no capacity had been removed long-term, ¡°just shuffled¡±. Barrios continued: ¡°Some megas have been postponed, others are still entering an already crowded market.¡±

And another factor fuelling uncertainty in the market was the new container shipping alliances starting in April. ¡°How will service be affected with them competing on similar corridors?¡± Barrios questioned. ¡°Will it become a price war?¡±