14 Feb Logistics / Freight – Land & Sea
Freight markets are at a tipping point as the extended rally seen across global basins has faded. North Atlantic Supramax fixtures are slowing, ahead of the carnival week in LatAm and the Chinese New Year (see freight table). USG-India fixtures are volatile with gaps of $4/t dollars depending on timings. There is a surplus of vessels in the Black Sea coaster market, but poor weather conditions are keeping prices high. Regular shipments of fertilizers and minerals will keep any potential price decreases in check. Waiting times at the Bosporus Straits are slightly higher than average at 9-15 hours. North Sea rates are falling as dry bulk trade has slowed after a strong Q4 17. The Arab Gulf market is seeing a limited number of Supras and handys in the region. Utilisation rates are increasing and it is keeping the market tight. Sulphur and fertilizer shipments are also increasing out of the Gulf to China and Pakistan. Outlook – Further weakness to be expected, a fall of $1-2/t for March laycans. Bunker prices are up $100/t year-on-year and are assessed at $400/t. Shipping rates will stay strong. Dry bulk ocean trade looks to grow between 3.5 and 4% in 2018, while the fleet is shrinking. Iron ore and grain shipments are expected to increase this year.
China The “Polar Silk Route” is being planned by authorities to develop shipping lanes through the Arctic and develop China’s international trade. It is part of a bigger $1trillion scheme to improve land and sea connections under the Belt and Road Initiative.
Mozambique Cargo handled by Maputo port reached 18.2 million tonnes in 2017 up from 14.9 million tonnes in 2016. The growth was helped by the dredging of the port access channel, which was completed in January 2017, increasing its depth from 11.0m to 14.2m. The work increased the cargo capacity at Maputo by 40%.
Turkey Work has started on a 2-kilometer (1.2-mile) long Çanakkale 1915 Bridge connecting Gallipoli on the European side and Lapseki on the Asian side. The project is expected to be completed within five-and-half years at a cost of around 10.35 billion Turkish liras ($2.80 billion). It will make travel time shorter by connecting [Turkey] with Europe, and help export and import trade.
Turkey A new canal 45-km (28-mile) Istanbul will run from the Durusu region on Istanbul’s Black Sea coast to Kucukcekmece Lake on the Sea of Marmara. It will provide a new maritime outlet for Bulgaria, Romania, Ukraine and Georgia, and for Russia’s Black Sea ports. Turkey’s environment ministry revealed that the canal will be 25 metres (82 feet) deep and 250-1,000 metres (825-3,300 feet) wide, depending on where the docks are located. The project will help reduce traffic on the Bosphorus Straits one of the world’s busiest waterways with around 42,000 vessels passing through the narrow sea lane on an annual basis.
USA The Association of American Railroads reported that overall carload volume reached 13,478,126 carloads, up 2.9% on 2016. Intermodal volume reached 14,011,834 units, an increase of 3.9 percent from 2016. There is a severe shortage of trucking capacity in the US as well as drivers. There is 1 truck for every 12 available loads. Water levels on the lower Ohio River are high enough to allow barges to transit the area of Lock 52/53 through the navigable pass of the dam without using the lock. The rising water levels have increased maximum water levels.