Ocean Freight Comments
Transportation and Export Report: Jay O’Neil, O’Neil Commodity Consulting: The conversations in global ocean freight markets have turned from “are things turning around yet?” to “have the markets reached bottom yet?” and most of the past optimism seems to have faded. Goldman Sachs put out a news story yesterday that projected that dry-bulk cargo rates would not see an end to their down-turn until 2020. They noted that the daily charter rate for a Capesize vessel has fallen from a high of over $100,000/day in 2008 to less than $10,000/day, while the average utilization rate of the dry bulk shipping fleet is set to decline from around 90 percent between 2008 and 2010 to 70 percent over 2015-2019. This infers that we have at least a 20-25 percent oversupply of dry-bulk vessels in the world fleet. The world container fleet is probably in worse shape as it continues to expand without regard to oversupply. The Baltic Indices fell back again this week and appear to be heading back to previous three-year lows.
Below is a recent history of freight values for Capesize vessels of iron ore from Western Australia to South China:
The charts below represent January-December 2014 annual totals versus year-to-date 2015 container shipments to the Philippines.
