Ocean Freight Comments
Transportation and Export Report: Jay O’Neil, O’Neil Commodity Consulting: Ocean freight markets did find bottom last week and have bounced off it in an attempt to eke out a little better revenue. I think we reached the level where vessel owners simply did not want to sail below those values.
We are up slightly on rates this week, but we still don’t have any real bullish news in the market to fuel a big rally. Therefore, it will be difficult to maintain much of a continued upward move for an extended period of time. As you see in the below chart, the Baltic Panamax index in the Atlantic was up 8 percent for the week and the Pacific index was up a whopping 25 percent. Of course, it takes a much smaller change to move things up 25 percent when starting from a small or low figure than when calculating from a bigger or higher one. As usual, the physical market has not responded as vigorously as the indices would indicate, but we are up for the week.
No significant new news in the PNW grain elevator labor situation. We still have two PNW export grain facilities that have locked out the International Longshore and Warehouse Union (ILWU), United Grain at Vancouver, Washington and Columbia Grain in Portland, Oregon. PNW grain elevators continue to work as the situation plays out. We are seeing a rise in labor tensions as we move into the June-July wheat harvest. We need to monitor this closely.
Below is a recent history of freight values for Capesize vessels of iron ore from Western Australia to China:
The charts below represent Jan.-Dec. 2011 and 2012, annual totals versus Jan.- April. (2013) container shipments for South Korea.
