Ocean Freight Comments
Transportation and Export Report: Jay O’Neil, O’Neil Commodity Consulting: Things aren’t getting any better for vessel owners, but I don’t think any rational individual thought it would.
It was indeed another mostly flat week in global ocean freight markets. Having said this, I must add that all-told freight markets really don’t have far to travel up or down. They are already at or near three-year lows, without much hope for a turnaround until perhaps 2017-18. We are stuck in rather dull markets and will likely just steam in circles for the foreseeable future. I have, however, noticed that rates have not yet forced many to take ships off the market in layup. January-April 2015 saw 241 new vessels delivered versus 177 vessels sold for demolition. This added a net 64 ships to the world’s dry-tonnage list. According to Greek shipbroker Golden Destiny, 2015 began with 85 percent of the world’s dry Supramax fleet of 1,992 ships being no more than 10 years old. Overall, 66.7 percent of the world’s dry bulk fleet has been built during the last 14 years. Golden Destiny data is showing 1,066 new bulkers due for delivery in 2015, 732 in 2016 and 184 in 2017. Although new Dry-Bulk vessel orders are down significantly, they can change quickly if owners see an opportunity coming.
Please note that I upped the cargo quantity on the U.S. Gulf to Rotterdam route. It looks like most of those soybean shipments are going out at 75,000 MT and the rate was adjusted accordingly. If we say soybean vessel rates from the U.S. Gulf to Rotterdam are around $13.00 and Brazil is close to $21.50, then U.S. soybeans should be fairly competitive to Europe.
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 the Vietnam.
