The Xeneta platform provides market trends and benchmarks based on current and historical freight rates. Of course, in the cycle of freight procurement and contract negotiation, new shipping contracts are always being established.
In these cases, the contracts negotiated near the present day may be contracted to start a few weeks or months in the future — but they are still signed today and reflect today’s market. In other cases, long-term contracts that extend past the present day also reflect the near-present market because they tend to be stable compared to the prices of short-term contracts.
Using the Market Horizon feature, you can extend your view of the Benchmarks and Trends graphs by three months.
To enable the Contract Horizon, start by clicking on the right-side of the date range picker on the graphs page.
Next, click Show Futures from the dialog that opens.
Finally, the graph will update to show an additional three months of data, indicated by a gray background on the graph.
The Contract Horizon is simply additional data about the state of the freight market. Having access to the Market Horizon is most useful in scenarios where having as many details as possible about the market is vital to your logistics strategy.
If there is a contracted price for shipping freight that is valid for one year and began three months ago, it would be considered part of the Contract Horizon because it extends for nine months into the future. Similarly, if there is a recently formed contract that is set to become valid within a month, then this too would be part of the Contract Horizon because it is set to happen past the current day.
Anything on the Contract Horizon, with time, will eventually become part of regular historical data. It can be thought of as a window into the very first contracts being formed for future dates.
Like the regular Benchmarks and Trends graphs, the Contract Horizon is also affected by the Contracted Within filter. As such, your view of the Market Horizon will vary based on how you choose to filter contracts based on their age.
In this example, we’ll consider a four month period where three of the months are part of the Contract Horizon. We’ll explore three different Contracted Within filter settings:
By including all long-term contracts as part of the Contract Horizon, we can see that the price of shipping from Shanghai to Hamburg remains steady for contracts running beyond the current day.
This view does not reveal very much because older long-term contracts tend to outnumber newer and younger contracts, such that the state of the market reflects the aged majority of contracts.
If we apply the Contracted Within filter to exclude all contracts older than 6 months, we get the following view of the market:
The average freight rate seen on the market begins to move slightly from month to month, showing less stability than the previous case.
Finally, by looking at only contracts that were created within the past 3 months, we get the “freshest” view of the freight market.
Unlike the other two views, this view suggests that the prices for the newest contracts on the market will in fact be higher when entering August before dropping a bit in September.
You’ll notice that the line depicting the market average disappears when entering October. This is because there do not exist enough contracts that are at most three months old and run into the future for the platform to display in aggregate.
The conclusion we can draw here is that the market participants that are entering freight contracts near to the present day appear to be paying higher prices for shipments scheduled in the coming months.