Ocean Freight Comments
Transportation and Export Report: Jay O’Neil, O’Neil Commodity Consulting: Dry-bulk freight markets are reluctantly following commodity market in a downward slump. In freight markets, it has been a story of reduced steel demand in China and a related drop in iron ore imports, along with an overall soft global economic picture and fears of a potential coming recession. All freight sectors are feeling the pain as daily hire rates have continued to drop. Q3 Panamax daily hire rates slipped to $22,575/day with Q4 paper down to $20,900/day. An ominous economic shadow has been cast across shipping markets.
Container market rates are also softening. U.S. consumer demand is finally dropping off and, with it, demand for containers. Spot rates are now below annual contract rates, and one has to wonder if the market will really need all the new-build container ships?
U.S. West Coast labor contract negotiations are ongoing with no sign of an agreement. The 1 July contract expiration will certainly pass without a new agreement in place.