Ocean Freight Comments
Transportation and Export Report: Jay O’Neil, O’Neil Commodity Consulting: Many analysts have been using the term “sliding lower” recently to describe Dry-Bulk markets. Some freight publications, however, have stated that the markets are “tumbling down”. Whichever way you want to describe it, markets have certainly gone the opposite direction from what vessel owners desire and need. Every time the market tries to rally, it is met with selling pressure. As the old saying goes “something’s got to give”.
The freight charts look oversold and the downward slide is slowing and is possibly coming to a stop? IMO2020 is quickly approaching and operating cost vis a vis fuel cost will jump 15-30 percent, depending on what analysis you follow. Dry-Bulk Panamax daily hire rates have dropped to $9,500-$9,800/day for Q1 2020. In the container freight markets, shipping companies are imposing fuel adjustment charges.
In other freight news, Malaysia has banned the use of open loop scrubbers in the country’s waters and the dumping of scrubber wastewater. China, Singapore, Fujairah, Panama, California, Connecticut, and Hawaii have also placed similar bans. DNV data shows that open-loop scrubbers account for about 80 percent of all the scrubber installations to date.
