Ocean Freight Comments
Transportation and Export Report: Jay O’Neil, O’Neil Commodity Consulting: It looks like another case of “what goes up must come down” in freight markets. The first quarter of 2018 has still not brought forth the cargo demand increases necessary to keep freight rates supported and moving up. Vessel owners are hoping that the second quarter of the year will brings improvements to markets. So, for now we are mostly going in circles until something changes in the supply and demand equation.
This week it was the Baltic Indices that reacted faster than the physical freight markets. The general consensus on container rates for grains is that we will see a gradual rise in freight cost over the next six months. This is mostly due to consolidation in the shipping industry via alliances and the increasing difficulties and higher cost of obtaining trucks and chassis.
Below is a recent history of freight values for Capesize vessels of iron ore from Western Australia to South China:
The charts below represent 2017 annual totals versus 2016 annual totals for container shipments to Indonesia.
