Ocean Freight Comments
Transportation and Export Report: Jay O’Neil, O’Neil Commodity Consulting: Dry-bulk markets found a little support this week as they struggle to recover the losses of the past three months. However, maintaining market values has been a constant challenge and markets remain on an up-and-down ride. Capesize markets have continued to slide lower over the past few weeks, and this does not bode well for the smaller size vessel markets. Paper markets seem to be leading the physical markets.
For the most part, grain container markets have been in a similar situation. All vessel markets are facing substantial increases in fuel cost as they move to meet the lower CO2 emissions standards for 2020 (reductions from the current 3.5 percent down to 0.5 percent emissions). One major shipping line estimates that container rates must go up by $35.00/TEU across the board for the company to recover its added fuel cost. I’m not sure the market will support that, especially with the stiff competition from the dry-bulk sector and inter-market competition. However, I do expect to see attempted GRI’s over the next few months.
