Ocean Freight Comments
Transportation and Export Report: Jay O’Neil, O’Neil Commodity Consulting: Global Dry-Bulk ocean freight markets had a good follow-through rally for the first three days of the week but started selling off on Thursday. This brought rates back very close to the levels of last week’s close.
Freight traders were expecting continued robust demand but found that, as iron ore prices increased, demand backed off. Demand in the grain sector remained good, but did not record any pickup in cargo demand. There is trade talk of 61,000 MT of corn from Paraguay coming into the port of Wilmington, Delaware on the U.S. East Coast in May. This should not be very trade disruptive; however, it does say something about trade competitiveness and U.S. domestic rail rate structures. If you want to know something about farmer grain movement in April, just take a look at the U.S. interior rail and barge rates. Not sure how barge lines are staying afloat at these low rates.
Container rates and logistics continue to struggle and bump around with the challenges related to consolidation within the shipping line industry.
Below is a recent history of freight values for Capesize vessels of iron ore from Western Australia to China:
The charts below represent YTD 2017 versus 2016 annual totals for container shipments to Malaysia.
