Ocean Freight Rates Fall
The cost to move grains and soybeans out of the United States has eased anywhere from 13% to 41% since hitting record highs during November. The American Soybean Association reports that from the Gulf to Japan the rate has dropped 13% since hitting a record $115 per metric ton in late October, ending this week at just under $100.
The Gulf to Europe was down by a similar amount to $66 per metric ton from the mid-November high of nearly $78. The Pacific Northwest (PNW) to Japan rate dropped the fastest down 41% to less than $50 per metric ton for the week of January 4 since hitting a record of nearly $84 in late October. Rates were last at these levels out of the Gulf in late September and late August from the PNW. These rates are derived from the changes taking place in the time-charter markets as shown in the figure on the next page for two key Panamax routes.
Barge freight rates ended about 8% lower during 2007, they followed a record year and ended the second highest on record. If it were not for the late summer surge in barge demand and improved grain export prospects, rates would have finished much lower. For 2008 the rate outlook is expected to be down 5%.
For more information on US commodity shipping see link to AMS USDA Transportation Services Branch
