Ocean Freight Comments
Transportation and Export Report: Jay O’Neil, O’Neil Commodity Consulting: I do not want to sound like a broken record, but there is not much new to say about these freight markets other than the fact that they slipped lower again this week. Global ocean freight markets simply got too optimistic about the future during the first two quarters of 2017 and now they are waking up to reality. Some operators gave up “slow steaming” practices and this added to market efficiencies and the vessel oversupply situation. Desperate owners push for all they can get out of market rallies and then end up shooting themselves in the foot. This week’s soft markets are being blamed on a short holiday week, but we know this is not the root cause. Though cargo demand will not likely support a rally in the coming weeks, we are most likely to entering a period of sideways market action until the U.S. fall harvest.
Below is a recent history of freight values for Capesize vessels of iron ore from Western Australia to China:
The charts below represent YTD 2017 versus 2016 annual totals for container shipments to Hong Kong.
