Steel Products Prices North America

Ocean Rates Rising - Shipping Industry Expects Profitable 2013

Written by Sandy Williams

The shipping industry is set for a profitable year for the first time since 2010 according to the September 25 MID-SHIP Report.  Freight rates are continuing to rise and demand for large size ships is finally beginning to outpace supply. 

The industry has faced a supply glut partially due to shipyards offering vessels at low prices and with “ECO” designs that cut down on fuel and operating expenses.  MID-SHIP says the low prices are beginning to disappear but shipowners are still buying more vessels than they need while bargains can still be had. 

The Chinese holiday from October 1-7 is expected to slow shipping down starting at the end of September. 

The Baltic Capesize market rose 1000 points in the last two weeks to 4329 points.  Average spot price for capesize is $42,211 vs. $29,674 two weeks ago.  Shipping is getting a boost from increased coal cargo and Chinese iron ore re-stocking.  MID-SHIP says another indicator of growth in the shipping industry is the investment of $9 billion in the last month for new building. Ship owners are expecting a good market from October though December with a less optimism for 2014/2015. 

The Panamax Market saw rates increase by 40 percent in the last three weeks.  Trans Atlantic round trip voyages are getting rates of $12,500 per day and Trans Pacific $15,500 per day.  Grain shipments from the U.S. Gulf to the east are getting paid $21,000 with a 1.2M ballast bonus for trips to the Pacific Ocean.

The Supramax Market in the US has average time charter rates jumping from $9,976 to $10,579 in the last two weeks.  Trips to the Far East from the US Gulf have increased to the mid to upper $20,000 levels.  Pacific rates are up from $8,575 to $9,695. 

Shipping in the Handysize Market to North Pacific ports (NOPAC) and Far East/Australian regions have increased by 10 percent to about $7650 per day.  The average of the four time charter routes is $8,204 vs. $7,754 + 9% two weeks ago. 


Increased grain shipments by barge and river level issues restricting navigation has pushed rates up by 25 percent. Coal shipments are down due to weak global market coupled with high spot barge pricing and a rise in ocean freight rate.  Low water conditions on the Upper Mississippi and Illinois Rivers is reducing maximum barge draft to 9’0”, slowing traffic and reducing cargo capacity. 

MID-SHIP reports railroad pricing is aggressive to the east coast.  According to a survey by The Boston Consulting Group, an anticipated rise in manufacturing in the U.S. due to a shift in production from China to the U.S. is expected to create a boom in truck freight.  Diesel fuel prices fell 2.5 cents to $3.949/gallon in the past week.  Fuel surcharges are expected to range from $.60 to $.62 cents per one way miles.


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