Market Perspectives – February 24, 2022

Ocean Freight Comments

Transportation and Export Report: Jay O’Neil, O’Neil Commodity Consulting: This is obviously a difficult and complicated time in ocean freight and commodity markets. The initial dry-bulk market response to the Ukrainian situation was to hike up prices due to the added risk factor. It has been reported that “war risk” insurance for vessels in the region is ranging between $200,000-300,000. It is likely that wheat, corn, barley, sunflower, and oil shipments from the area will have to be switched to other origins and this will add tonne-miles, and therefore cost, to each voyage. Things are going to be quite jumbled for a while and this will add to market volatility.

I do not see much direct freight impact on container markets, other than the fact the jump in fuel prices will affect all sectors. There is also the risk of a global economic downturn. So, we probably will be faced with different market forces pulling in different directions.