Image credit: Xeneta
The Xeneta Summit in Amsterdam became a hub of insights as Stanley Smulders, Director of Marketing & Commercial at Ocean Network Express (ONE), shared perspectives on the challenges gripping the ocean freight shipping industry. In a keynote Q&A with Xeneta CEO Patrik Berglund, Smulders emphasized the need for innovative collaboration amid the market’s current volatility.
Facing the Storm: Volatility in the Ocean Freight Market
Acknowledging the choppy waters ahead, Smulders remained optimistic about the industry’s growth potential. He asserted that despite the current market’s volatility, global trade and consumption patterns ensure sustained growth, underlining the industry’s enduring role.
“The industry ordered a lot of ships a couple of years ago, and they are coming in now. While some might argue we’ve overdone it, managing supply and demand is crucial,” Smulders explained. Strategies such as scrapping older ships, redeploying assets, and implementing slow-steaming to control capacity are on the table.
Tackling Rate Fluctuations and the Tender Season
As the industry navigates the tender season, attention turned to rates. Smulders recognized the short-term volatility of individual trade lanes but pointed out the challenges carriers face in annual deals where sustained losses may be inevitable.
Discussing the possibility of an indexing-based pricing system, Smulders expressed openness but cautioned about its effectiveness in both rising and falling markets. He suggested that establishing upper and lower limits in the index could provide the necessary stability for both shippers and carriers.
Charting a Course for Stability
Smulders concluded with a nod to the industry’s resilience, emphasizing the importance of win-win solutions for long-lasting agreements. Reflecting on unprecedented freight rates in 2020-2022, he noted that while such extremes might not recur, rate fluctuations remain an inherent aspect of the industry.
About Xeneta:
Xeneta stands as the leading ocean and air freight rate benchmarking and market analytics platform, revolutionizing the shipping and logistics sector. With a comprehensive database covering over 160,000 global ocean trade routes and 58,000 airport connections, Xeneta provides real-time insights to navigate the complexities of the freight industry.
Source: Xeneta
