Containerlines are on track to hammer home their advantage next year with long term contracts expected to be sealed with clients for record figures.
As the first round of tender data has started to roll in, Xeneta data indicates that most of the 2022 contracts will be at record-high levels. Carriers are asking clients to pay up for secured, long term deals or risk being hit by the vagaries of the spot market.
On the China to North Europe trade, the average of the bids that have come in is $11,900 per feu with transpacific long term rates, which are at an earlier tender process stage, showing average bids of $5,700 per feu. By way of comparison, the average price paid for a long-term contracted container moved from the Far East to North Europe during 2021 stands at $3,807 per feu and stood at just $1,775 per feu this time last year.
The 10 leading publicly listed container shipping lines are on track to earn a record $115bn to $120bn in profit this year, Alphaliner predicted earlier this month. The long-term contract data coming in this month suggests 2022 could be another year of record profits for liners.
Peter Sand, chief analyst at Xeneta, told Splash: “As for carrier profitability in 2022, this is nitromethane fuel – you know the kind of fuel that dragsters run on.”
Assuming a 50:50 contract versus spot split, and $11,900 on average for the first half of 2022 for new long term rates, Sand predicted 2022 will be another year of record profits for the carriers.
Spot rates remain highly elevated with indices gently increasing last week.
“As manufacturing in China is expected to slow down significantly over the Lunar New Year holiday at the start of February, ex-China prices are expected to increase in the weeks ahead,” commented Judah Levine, head of research at Freightos.
The National Retail Federation in the US estimates that annual US ocean imports will set a new record in 2021, up more than 20% compared to 2019.