Ocean Freight Comments
Transportation and Export Report: Jay O’Neil, O’Neil Commodity Consulting: The Lunar New Year holiday is upon us and, except for the celebratory Asian fireworks, things have gotten pretty quiet. The Baltic Indices are slightly higher and physical rates have bumped up slightly on low trade volume.
The only people who will be trying to trade freight next week will be those who have not covered their needs prior to the holiday and find themselves in an urgent situation. So, rated could go either way during the holiday week. The key will be not to be in critical need until everyone returns to work. Private equity investment funds that entered the ship building finance game last year in the hopes of getting in at the bottom and catching an upswing are reporting negative results and reevaluating their investments.
I do not know if any breaking news will come out prior to this report going to print but the Twitter rumor mill says that the West Coast PMA-ILWU container port labor negotiations are making good progress and could be very close to a settlement. Keep your fingers crossed! I think the U.S. Secretary of Labor has told the union to come to an agreement by today or the leaders of both sides will be taken to Washington D.C. to talk with the President who could issue a forced order to return to work under the 1947 Taft-Hartley act.
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 Malaysia.
