Ocean Freight Comments
Transportation and Export Report: Jay O’Neil, O’Neil Commodity Consulting: This week it was a case of “what goes up must come down” or “the party can’t last forever.” There just wasn’t enough justification to keep market values up that high. We continue to be in a bumpy market and must expect things to move up and down going forward. The real issue is where rates will end up at year’s end, and where they happen to be at the moment when a vessel needs booked.
My long-term projection is that things will probably be a little bit higher 6-9 months out, but we will get opportunities to lock in good (lower) rates from time to time if no one gets greedy.
U.S. interior rail logistics to West Coast ports in the PNW seem to have returned to a basic level of normalcy. Grain shuttle trains are getting through and delivered in normal volumes, and logistics are clearing up. We do however still have a very have a very healthy vessel lineup of 63 ships waiting to load. So, business off the PNW remains robust.
Below is a recent history of freight values for Capesize vessels of iron ore from Western Australia to China:
The charts below represent YTD 2017 versus January-December 2016 annual totals for container shipments to China.
