News > Shipping costs set to rise in 2021



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Shipping costs set to rise in 2021


For those in the business of shipping and grain, 2020 was a roller coaster ride. Second-quarter lock downs prompted demand for some grain-based products to spike as consumers stockpiled and splurged on specific goods, including specialty flours. However, overall global economic demand for most commodities fell precipitously, and bulk carrier shipping spot and time charter rates slumped accordingly.
In the second half of the year demand returned, prompting a summer upsurge in shipping costs. For capsize vessels, this largely tailed off in the fourth quarter, but strong agricultural volumes helped support prices for vessels in the panamax class and smaller — the workhorses of the grain and soybean trades.
“Support for the mid-sized ships in the last months of the year came from US exports of soybeans, which have been record-breaking in the first months of the export season,” noted shipping association Bimco in its November report. “Outstanding sales for this season are also high — 30.1 million tonnes — and records could be broken.”
Indeed, soybean exports from the Americas to China gifted ship owners welcome support throughout the latter part of 2020, while grain exports from the Black Sea and other Northern Hemisphere origins have provided additional ballast.
“With strong soybean exports from both Brazil and the US, China has imported a total of 83.2 million tonnes of soybeans, which is 168 more panamax loads — approximately 75,000 tonnes per load — more than in the first 10 months of last year,” noted Bimco in November. “Given the long sailing distances between Brazil and the US to China, the increase in ton-mile demand is considerable.
“Other grain exporters in the Northern Hemisphere have also provided extra demand for these ships. In the year to date, there has been a 25.4% increase in ton-mile exports on panamax and supra max ships out of the Black Sea, with Russia and Ukraine the big drivers.”
Freight rate volatility
All of which has been reflected in lurches in freight rates across the various bulk carrier classes this year.
The Baltic Exchange Dry Index (BDI) has been particularly volatile this year. The BDI sat at 1230 points on Nov. 27, down from over 2000 points in October but far above the depths of 393 recorded in May when bulk carrier demand, especially for capsize carriers, collapsed as the coronavirus pandemic strangulated global economic output.
The GOFI as of Nov. 25, 2020. It is calculated on a weekly basis, with the first week of January 2013 taken as its base of 100.
The Baltic Exchange Handsize Index (BHSI), meanwhile, was stuck below 500 points from Jan. 1 through Aug. 17. It then rose to a peak of 649 on Nov. 27, the last reading taken before World Grain went to press.
The Baltic Exchange Panamax Index reached 1429 points on Nov. 27, down from a 2020 peak of 1824 recorded Aug. 14 but far above the 500- to 900-point range ship owners endured in both January-February and May-June.
In terms of grain shipping costs specifically, the IGC Grains and Oil seeds Freight Index (GOFI, see page 54) reached 117 on Nov. 24, up some 17 points compared to a year earlier and far higher than the 72 points recorded in May at the height of global lock downs.

Source: WWW.world-grain.com


11:06 - 26/02/2021    /    Number : 18439    /    Show Count : 423


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