Ocean Freight Comments
Transportation and Export Report: Jay O’Neil, O’Neil Commodity Consulting: Happy 2016 to all! To no one’s surprise 2016 is starting out just like 2015 ended. Global ocean freight markets remain defensive and most analyses are not anticipating a significant market turnaround until 2017. This holds true for both the Dry Bulk and the Containerized cargo markets. I believe the only surprise in 2015 was that we did not see more shipping company bankruptcies; 2016 will likely change that. We are already witnessing increased acts of desperation on the part of vessel owners via forced vessel sales at highly discounted values. Those with deep financial pockets will benefit and survive; those who do not will have to drop out.
Once again the biggest issues facing shipping companies are as follows: How many vessels can we scrap in 2016 and when will the global economy pick up steam? As you will see below, the vessel lineups at the U.S. PNW and Texas Gulf have really drawn down.
Below is a recent history of freight values for Capesize vessels of iron ore from Western Australia to China:
The charts below represent year-to-date 2015 versus January-December 2014 annual totals for container shipments to Taiwan.
