Ocean Freight Comments
Transportation and Export Report: Jay O’Neil, O’Neil Commodity Consulting: Like many things, the Baltic Indices and physical ocean freight rates could not stay down forever. They have, at least for now, bottomed out and are attempting a small bounce in many markets. The bounce however does not seem to be affecting the South American market to Asia, as that route is still under pressure and rates remain depressed.
I do not expect things to go up too much due to a large oversupply of vessels. As this week’s freight fixtures show, we are entering the beginning of the South American soybean shipping season and it appears the Argentine farmers are finally letting go of some supplies. Oilseed shipping is starting to shift.
The other big news this week is that the ILSW labor negotiations on the West Coast are not progressing very well. Work slowdowns and stoppages continue with greater severity and frequency, and things continue to slide down hill on service. Everyone needs to be very diligent regarding their shipment and arrival logistics.
Below is a recent history of freight values for Capesize vessels of iron ore from Western Australia to South China:
The charts below represent January-December 2014 annual totals versus year-to-date 2015 container shipments to South Korea.
