SIMIC

MAY witnessed a notable decline in global long-term freight rates within the container shipping industry, reports Ventura, California's gCaptain.

The contracted cost of shipping containers experienced a plunge of 27.5 per cent, as reported by Xeneta's Shipping Index (XSI).



This decline marks the ninth consecutive month of rate drops and stands as the most substantial monthly decrease ever recorded on the platform.



"If industry observers were left wondering just how bad it could get for carriers after the 10 per cent fall in long-term rates seen in April, here's the answer," said Xeneta CEO Patrik Berglund.



"This is the largest drop we've ever experienced on the XSI, which charts real-time global rate developments, and it paints a bleak picture of the state of the industry."



Xeneta believes the collapse reflects a new market reality. "The main driver is the fact that May marks the point when existing 12-month contracts in the US come to a conclusion and new agreements come into force," said Mr Berglund.



"These reflect the reality of today's subdued markets, so are priced much, much lower than their predecessors. The impact of that on the wider industry is here for all to see."