Ocean Freight Comments
Transportation and Export Report: Jay O’Neil, O’Neil Commodity Consulting: The extended Chinese New Year holiday and the coronavirus situation have caused uncertainty in global freight markets. Chinese markets should reopen on Monday, however, four Chinese provinces asking companies to extend the Lunar New Year holiday to February 10th. No one knows the exact extent of economic damage that will be inflicted by the virus, or how long its impacts will last. All that is known is that the news and market uncertainty have been negative on freight volumes and rates.
In August and September 2019 daily hire rates for Dry-Bulk Panamax vessels reached over $14,000/day. Today, spot rates are slightly below $5,000/day. Some Pacific routes have even traded under $3,500/day. Dry-bulk spot rates are very depressed and difficult to pinpoint. A large carry exists between the spot and 30-day rates verses June-July values. Everyone is hoping things will eventually get better.
Alphaliner research has estimated that the coronavirus will “wipe out 6 million TEU of Chinese box volumes in Q1 of 2020” and that container vessel calls on Chinese ports are already down by 20 percent. Many dry-bulk ports and much industrial activity has been shut down due to a lack of labor.
