Category Archives: Shipping

Container Shipping: The Next 50-Years

A Comprehensive Study by McKinsey & Company, New York, The Worldwide Management Consulting Firm:

Link: Container-shipping-The-next-50-years.

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Coastal Freight Market Report & Fixtures in Black, Azov & Caspian Seas (week #40)

Fixtures List: Fixtures Report Week 40

Market Comments: As it became known at the beginning of this week, Turkey has introduced an asymmetrical measure complicating documentary procedure for importing wheat, corn and oilseeds in the country. Now Russian Exporters will have to apply for additional permissions for delivering their goods to Turkey, which can trigger protracted delays and cancellings of already fixed vessels in the short run, as well as a decrease in freight rates for voyages from the Azov Sea in the long run.

According to the latest information received from Traders, in other countries buying Russian wheat, grain prices has shown radically negative dynamic, as market participants have been trying to resell wheat intended for Turkey to other countries where possible.

Importers in the region are using the desperate position of Traders and have already started to knock down rates on new contracts, which leaves Ship Owners no hope for any extra freight premium and will lead to a decrease in rates.

Ship Owners, from their side, suppose that freight rates must keep at the current levels for some more time due to another new closure of the Kerch Straight (11-14/10), impacting directly the amount of tonnage in the region.

The chances are, by the moment of opening the Straight, most part of the fleet stuck on the Black Sea side can be cancelled for arriving late and due to Owners’ reluctance to move the laycan dates. In this case an extensive amount of free spot tonnage can appear at once.

The main beneficiary of the current situation, apart from non-Turkish Importers, is Charterers of non-grain and cheaper cargoes, who for the first time in so long have got an opportunity to regulate the freight market in the region.

 

Coasters Freight Market Report in Black Sea, Azove Sea & Caspian Sea (Week #38)

Fixtures ListFR #38

CommentsThe Azov region is experiencing a period of uncertainty. Due to the strengthened ruble and current freight rates level Traders have suspended sales and new contract conclusions. As reported by some Exporters, for normal cargo turnover to recover, either the rates must go approximately 5$ down, or the dollar must stabilize at a level higher than 59 rubles.

Since Ship Owners have been forcing Charterers to focus on voyages to the Turkish Black Sea coast, local warehouses at the Port of Samsun with the total storage capacity of 300 000 tonnes cannot receive any more goods, and the market participants has been faced with a problem of slow discharge at this particular port. In order to avoid further demurrages, cargo receivers are relocating their port of delivery to Marmara.

Some Traders are showing confidence that freight rates will decrease soon, expecting a substantial number of vessels to open simultaneously after the long idle time in Turkish ports.

Traders in the Azov region are trying to evade CIF sales, preferring to ship their goods on a FOB basis, with a view to reduce risks associated with searching for proper vessels.
The shortage of fleet remains critical in the most remote river ports on the Volga. Since the opening of navigation, voyages there have been relatively rare, which led to an accumulation of significant cargo volumes at river silos. Charterers keep increasing their ideas for freight rates, but this has little impact on the actual amount of shipments.

According to some Exporters, tariffs for railway delivery to sea ports have reached parity with the cost of analogical transportation by water, which reduces the possibility of further rates increase for voyages from river ports.

Plogos

Freight Market: Coasters in the Region of Azov, Black Sea & Caspian Sea (Week #38)

Fixtures Report: Glogos_Freight_Report_Week_38

Comments:

As it usually happens, with the coming of the autumn the weather factor has begun to make significant adjustments in the plans of Charterers and Ship Owner. During the last week, the eastern wind in the Azov region was keeping the water level at -1,5 to 0-meter marks (in Azov/Rostov at about 2,9 m), which practically paralyzed work in the ports. A line of 20 ships waiting for a water level which would allow for the safe and smooth loading and beginning of their voyages has accumulated on the outward roads of Azov Port.

The water level in Yeisk is 3,4 to 3,7 meters now. It allows to load and set sail vessels with the carrying capacity up to 3000 metric tons. Large-sized vessels, that have not managed to load in time in high water, have to idle in their berths now, in the hope for a rise of the water level. In a similar way, a line of about 10-15 vessels has shaped on the outward roads of the port of Yeisk. In such conditions, the most demanded vessel type proves to be Omskiy, with the draught of 3,26 m. This allows Ship Owners to pump up the rates for it particularly. The limitation draught in Temryuk is staying at the same level as earlier – 4,6 m, therefore a lot of Ship Owners will have to change their minds in favor of this port. As a result, freight rates in Temryuk and other more or less deep-water ports must decrease soon.

The offshore eastern wind is expected to be prevailing in the region up until October 5. As long as the wind direction does not change, there will be no hope for the betterment of the draught limitation in Azov ports.

In market participants’ opinion, such delays most seriously affect major exporters performing their grain transshipment programs at Caucasian anchorage stations, as such events disrupt the regularity of voyages and, as a result, can lead to the idleness of the heavy-tonnage fleet.

The consequences of the water level decrease could have been less grave, but part of the fleet on the way to their loading points got stuck in the Black Sea, due to the storm continuing for the most part of the week. That is one of the reasons why the market did not face a wave of cancellings or a drastic hike of freight rates.

In the Caspian region, the shipping market is retaining its bias favoring Ship Owners. The main trend of the end of October is the rumors about the withdrawal of a substantial amount of the fleet from the region for wintering in the Azov and Black Seas. According to information received from the port of Astrakhan, Caspian fleet last winter was almost 1,5-times larger in number than in the same period a year before. For more, the cargoes transported practically did not include wheat, subjected to an embargo.

Taking into account these factors, market players are more closely monitoring the number of fleet this year. By preliminary estimates, the amount of cargo in the region is expected to be bigger, yet not significantly, this year than a year before, and the amount of fleet smaller. A more definite forecast will be possible closer to the end of the navigation period.

Source: Glogos

Freight Market: Report on Coasters Market in Black & Azov Sea

Summary by Glogos Shipping: The Azov region is experiencing a period of uncertainty. Due to the strengthened ruble and current freight rates level Traders have suspended sales and new contract conclusions. As reported by some Exporters, for normal cargo turnover to recover, either the rates must go approximately 5$ down, or the dollar must stabilize at a level higher than 59 rubles. Since Ship Owners have been forcing Charterers to focus on voyages to the Turkish Black Sea coast, local warehouses at the Port of Samsun with the total storage capacity of 300 000 tonnes cannot receive any more goods, and the market participants has been faced with a problem of slow discharge at this particular port. In order to avoid further demurrages, cargo receivers are relocating their port of delivery to Marmara.

Some Traders are showing confidence that freight rates will decrease soon, expecting a substantial number of vessels to open simultaneously after the long idle time in Turkish ports. Traders in the Azov region are trying to evade CIF sales, preferring to ship their goods on a FOB basis, with a view to reduce risks associated with searching for proper vessels.
The shortage of fleet remains critical in the most remote river ports on the Volga. Since the opening of navigation, voyages there have been relatively rare, which led to an accumulation of significant cargo volumes at river silos. Charterers keep increasing their ideas for freight rates, but this has little impact on the actual amount of shipments.

According to some Exporters, tariffs for railway delivery to sea ports have reached parity with the cost of analogical transportation by water, which reduces the possibility of further rates increase for voyages from river ports.

Report of Fixtures: Glogos_Freight_Report_Week_36 (1)

Source: Glogos

The New Kerch Bridge: Implications for Shipping & The Grain Trade

Despite international sanctions against the Kremlin, the bridge construction between the Kertch strait has started and the first arch has been built. This bridge will connect Russia and Crimea, will be 19 Km long and should be finished in 2019. The construction of this bridge, is creating important logistical problems for Ukraine. Indeed, navigation for cargoes between the Azov sea and the Black sea has been suspended during certain days at the end of August and this could occasionally continue in September and October.  This situation could also penalize exports since the Azov sea is an important crossing point for Russian grains departing from Rostov on the don. On the long term, the bridge could be a real problem for cargoes because besides being constructed in low water depth, maximal heights is limited at 33 meters. The agricultural ministry is estimating that once the bridge is constructed 33% of Ukrainian cargoes won’t be able to cross. In this context, exporters have already planned to move from the port of Mariupol in Ukraine directly onto the Black sea.

Source: Agritel