Dry Bulk Ocean Freight Rates Up

This article is taken from USDA's Sept. 21 Grain Transportation Report:

Ocean freight rates for shipping dry bulk commodities, including grains have been rising over the past 6 weeks.

As of September 14, the ocean freight rate for shipping bulk grain from the Gulf to Japan was $42.50 per metric ton, 15 percent increase over the past 6 weeks.

The cost of shipping from the Pacific Northwest (PNW) to Japan was $23.50 per metric ton, 24 percent increase over the past 6 weeks.

The Gulf-to-Japan rate has increased 21 percent since the beginning of the year and the PNW-to-Japan rate has increased 32 percent since the beginning of the year.

Both rates have almost doubled since February 2016.

According to the September 14 edition of O’Neil Transportation and Export Report, rates have increased due to strong coal and iron ore imports by China, as the Chinese government plans to reduce domestic coal mining by as much as 25 percent.

However, it is yet to be seen if the higher ocean freight rates are sustainable, especially after the fall grain harvest season.