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OSLO: December 12, 2018. Xeneta claims the ongoing trade war between the US and China has left senior executives having to closely scrutinise fluctuating ocean and air freight rates.

Xeneta CEO Patrik BerglundIn an unpredictable geopolitical environment, highlighted by last week’s arrest of Huawei’s CFO in Canada, the freight rate benchmarking and market intelligence platform says shippers need agile logistics strategies, with the option of shifting transportation mode whenever necessary.

“Nobody, not even the opposing sides in this evolving economic conflict, seems to know what is going to happen next,” comments Xeneta CEO Patrik Berglund (pictured). “At the beginning of December we had presidents Trump and Xi hailing an apparent ceasefire at the G-20 meeting in Argentina, only for the Huawei case to quickly illustrate that hostilities are far from over.

“The 90-day breathing space the US has given China with regards to the next round of tariff hikes may or may not last that long, and in the meantime that will lead to a rush to fulfil shipments and avoid the looming taxes. Which, in turn, has an obvious impact on shipping rates.

“What executives, particularly CFOs, must bear in mind is what mode suits their immediate business needs. Is there immediate demand that can be met, and a competitive advantage that could be gained, by utilizing airfreight? Could new tariffs or restrictions be avoided by taking the plane? Or could costs be cut and financial risks, and/or inventories, be better managed in the current climate by looking to the ocean?”

The Xeneta Shipping Index for November showed an increase in overall global ocean freight rates after three months of falls. The US export index in particular showed a strong increase, climbing 3.1 percent.

“We have entered a period of increased complexity and volatility,” Berglund concludes, “with regard to rates as well as politics. In this climate shippers need an in-depth, multi-layered understanding of market intelligence to get the deal that’s right for them. And at the end of the day, that’s what this is about for everyone.”

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