Ocean Freight Comments
Transportation and Export Report: Jay O’Neil, O’Neil Commodity Consulting: Is the market getting better or have we just hit bottom and found levels that no one can afford to sell below? I think we have probably arrived at this point in the market. The Baltic indices experienced a small bounce this week and traded at slightly higher levels each day. The improvement was welcome but feels a lot like clawing very slowly out of a big muddy hole – with the fear of sliding back down ever present.
Fundamentally nothing has changed so we will have to see how far the prevailing rally can go; probably not too far. I do not believe the market is finished doling out all the pain.
On the Container shipping side of things, recent statistics show that the total global container shipping fleet sits at 6,080 vessels of 20,164,633 TEU capacity. These statistics also show that 2015 container vessel growth reached 8.8 percent (20,000 TEU) while cargo growth was only about 2 percent. The estimates for 2016 are not much different with vessel growth of 5.1 percent (21,025 TEU) and cargo growth of 2 percent if we are lucky. So, both sides of the shipping industry remain in a world of hurt.
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 2016 versus January-December 2015 annual totals for container shipments to Thailand.
