Bulk Shipping Getting More Expensive; Grain Rates Remain Relatively Stable

This article has been reprinted from the July 12 USDA Grain Transportation Report.

According to a July 9 report by Amrith Ramkumar of the Wall Street Journal, the Baltic Dry Index (BDI)—which measures transportation rates in the bulk business—has surged nearly 50 percent since the end of May.

This is in response to a push by companies to move manufacturing materials before levies or any escalating tariffs take effect.

The prices for commodities like copper and iron ore have been sliding, largely due to worries that the escalating tariffs will reduce global demand.

However, according to a report by O’Neil Commodity Consulting, grain rates have not seen any significant increase since the beginning of the year because the movement in the BDI is not often reflected in the physical rates.

Grain rates have fluctuated between 1 to 3 percent since the beginning of the year.

The market is still experiencing excess vessel supply, although the gap between vessel supply and demand is shrinking.