Ocean Freight Comments
Transportation and Export Report: Jay O’Neil, O’Neil Commodity Consulting:Global ocean freight markets are showing no mercy towards vessel owners. Every time it seems the market cannot go any lower, it does. The Baltic indices and physical markets continued their downward slide.I fully expect to see more vessel layups. Owners are obviously not willing to sell at these price levels for three-to-six months out, but continue to take what they can get to keep vessels employed month-by-month.Capesize iron ore rates from western Australia to China do seem to have bottomed out and bounced slightly this week. The Lunar New Year celebrations are fast approaching.
Container markets for grain shipments are also weak, but seem a little more stable. Rates from Chicago area to China or Taiwan are running $1,300-$1,400 per container for a 40ft. box. The biggest concern in containerized grain markets are the 45-70 day delays in getting loaded containers put on a ship at West Coast ports. Empty containers for loading in the interior do not seem to be a particular problem. But the West Coast port loading delays are making it very problematic for sellers trying to comply with contract shipment dates.
Below is a recent history of freight values for Capesize vessels of iron ore from Western Australia to China:
The charts below represent January-December 2014 annual totals versus year-to-date 2015 container shipments to Hong Kong.
