Market Perspectives – October 20, 2022

Ocean Freight Comments

Transportation and Export Report: Jay O’Neil, O’Neil Commodity Consulting: Are dry-bulk markets up or down? The answer is “yes”. This was another week of adjustment as the Baltic indices and FFA paper markets tried to catch up with last week’s physical markets, and physical markets decided to adjust lower to match up with last week’s paper markets. In the end, indexes were slightly higher while physical rates were little changed. Dry-bulk markets are still looking for reasons to rally but cannot find fundamental support to do so. Increased cargo demand is simply not yet surfacing.

The low water situation on the Mississippi River and resulting barge restrictions continues to be the major story in U.S. transportation markets. Difficult river logistics and high barge freight costs continue to push  U.S. corn and soybean exports to West Coast ports.

U.S. railroad labor contract negotiations continue without a resolution in sight. The next deadline is  19 November. I still do not expect a U.S. rail strike to occur but remain less confident about the situation with the ILWU union and West Coast Container ports.