Long-term contracted ocean freight rates held comparatively steady for the month of May despite the widespread ramifications of Coronavirus, said the CEO of Oslo-based Xeneta, a leading ocean freight rate benchmarking and market intelligence platform.

Xeneta’s latest XSI Public Indices registered a 1.2 per cent decline during May. This follows a 0.7 per cent increase in April, leaving the index up 1.7 per cent for 2020 so far, said the report from Xeneta.

The unexpected rise in April, after a 0.5 per cent fall in March, was attributed to the proactive strategies of container ship operators, who were withdrawing market capacity and adjusting sailings in an attempt to balance supply and demand.

That approach continues to mitigate damage, while the gradual opening of national economies is, added Patrik Berglund, CEO of Xeneta.

“Given the debilitating effects of the pandemic on global economic activity, there may have been a belief that rates would freefall, but not so,” he noted. “Owners have been quick to remove surplus capacity and as some, particularly European, countries cautiously reopen we’re seeing carriers, such as those in THE Alliance, announce plans to reinstate sailings.

“Contracted rates have held up well, some would say surprisingly so, while spot rates on key routes have also stood strong. With some national governments stepping in to support the industry - such as those in South Korea and Taiwan, who have both announced emergency funding of $1billion for shipping – a ‘blood bath’ has largely been avoided. Nevertheless, it’s early days and many owners have posted worse than expected Q1 results and, it has to be said, will be dreading going public with Q2 figures.”

“The future, unfortunately, remains uncertain. That makes it absolutely essential for all stakeholders in the shipping value chain to access the latest intelligence to ensure they stay up to speed and get optimal value when negotiating rates,” Berglund said.