Ocean Freight Comments
Transportation and Export Report: Jay O’Neil, O’Neil Commodity Consulting: The Lunar New Year holiday is finally past, and everyone is back at their desk trading. Market action this week suggests that traders believe the past 13-week market drop went far enough and that it is time for values to bounce back. Both paper and physical freight markets rallied this week, primarily in the Q1 and Q2 2022 periods. From a percentage point of view, this week’s rally was impressive. The key to these markets will be the degree of follow though action as we navigate the balance of Q1 2022.
Freight rates and movements from the Black Sea are uncertain as the Russian navy is conducting war drills and blocking Ukrainian ports.
Most of the chatter in container freight markets revolves around shipping lines engaging in high priced 2-3-year contracts with charterers, and, of course, the upcoming labor talks on the U.S. West Coast. Most in the industry do not expect to see significant improvement in container and supply chain logistics before the end of 2022.
