Ocean Freight Comments
Transportation and Export Report: Jay O’Neil, O’Neil Commodity Consulting: Global ocean freight markets continue to be conflicted. Those trading the Baltic Indices and paper market seem to want to push things upward. The physical market, however, is not so willing to follow. And investors, mostly the fund money, continue to ask: is this the right time to invest in vessels? Is the market finally poised for a turnaround? This is an intriguing question but it will take a lot more than wishful thinking and hoping to make it happen. I read a very interesting freight article today that suggested that it may take ten more years before vessel owners witness a true turnaround in values. I obviously can’t predict the exact timing of a potential market turn, but do not believe it will come this year or next. So hang on to your hats; we are likely to experience rough seas ahead and more financial fallout.
Below is a recent history of freight values for Capesize vessels of iron ore from Western Australia to China:
The charts below represent January-December 2014 annual totals versus year-to-date 2015 container shipments to the Philippines.
