Ocean Freight Comments
Transportation and Export Report: Jay O’Neil, O’Neil Commodity Consulting: Vessel owners and operators have received an early Christmas present from the market rally of the past two weeks. I am not convinced that this will be a gift that keeps on giving since it may be running out of steam as we head into the holiday period. However, it has provided limited relief for those who have been struggling with vessel ownership. The uptick in rates has been fueled by increased Chinese imports of iron ore and by better grain and coal exports from the U.S..
As usual, vessel owners are not jumping to fix at these higher rates but instead are trying to hold out for more.
I think that is generally considered being “greedy” or at least eternally optimistic.
The Handysize and Handymax markets continue to take no prisoners and have not looked back in many weeks.
In the world of ocean freight the new mantra seems to be that bigger is better and that is the way things are going. Smaller vessels are becoming a minority in relative percentage of the fleet total and their rate spreads are widening versus the larger cargo movements.
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 2011 and January-December 2012 annual totals versus January-September 2013 year-to-date container shipments for Taiwan.
