Ocean Freight Rates Continue To Drop
Since the beginning of January, ocean freight rates for shipping bulk commodities (including grains) have continued to drop, mirroring the slump in global bulk trade. In the week ending April 23, shipping bulk grain from the U.S. Gulf to Japan cost $37.25 per metric ton (mt)—a 19-percent drop from the first available rate on January 2.
Also, in the week ending April 23, shipping from the Pacific Northwest (PNW) to Japan cost $19.25 per mt—23 percent less than on January 2. Despite rallying slightly between February 13 and March 5, rates have continued to decline since then.
The slump in the global dry bulk results from recent supply chain disruptions around the globe.
Corn Boosts Total Grain Inspections
For the week ending April 23, total inspections of grain (corn, wheat, and soybeans) for export from all major U.S. export regions reached 2.17 million metric tons (mmt).
Grain News on AgFax
Total grain inspections were up 21 percent from the previous week, down 15 percent from last year, and down 17 percent from the 3-year average. With a sharp increase in week to week Asia-destined corn inspections, total corn inspections rose 54 percent.
Total wheat inspections decreased 1 percent from the previous week, and soybeans increased 1 percent. Total grain inspections jumped 62 percent in PNW and increased 7 percent in the Mississippi Gulf.
FMC Published Interpretive Rule on Detention and Demurrage
On April 28, the Federal Maritime Commission (FMC) published Docket No. 19-05, Interpretive Rule on Demurrage and Detention under the Shipping Act. The interpretive rule provides guidance regarding what FMC “may consider in assessing whether a demurrage or detention practice is unjust or unreasonable.”
The rule followed years of complaints that unfair detention and demurrage practices by ocean carriers and terminal operators unfairly penalized U.S. importers, exporters, transportation intermediaries, and drayage truckers for circumstances outside their control.
Snapshots by Sector
For the week ending April 16, unshipped balances of wheat, corn, and soybeans totaled 22.6 million metric tons (mmt). This represented a 26-percent decrease in outstanding sales, compared to the same time last year.
Net corn export sales were 0.727 mmt, down 20 percent from the past week. Net soybean export sales were 0.345 mmt, up 41 percent from the previous week. Net weekly wheat export sales were 0.245 mmt, up 37 percent from the previous week.
U.S. Class I railroads originated 20,690 grain carloads during the week ending April 18. This was a 7-percent decrease from the previous week, 16 percent less than last year, and 14 percent lower than the 3-year average.
Average May shuttle secondary railcar bids/offers (per car) were $110 below tariff for the week ending April 23. This was $63 less than last week and $202 lower than this week last year. There were no non-shuttle bids/offers this week.
For the week ending April 25, barge grain movements totaled 662,000 tons. This was 0.4 percent more than the previous week and 56 percent more than the same period last year.
For the week ending April 25, 419 grain barges moved down river—6 more barges than the previous week. There were 613 grain barges unloaded in New Orleans, 16 percent more than the previous week.
For the week ending April 23, 35 oceangoing grain vessels were loaded in the Gulf—3 percent more than the same period last year. Within the next 10 days (starting April 24), 45 vessels were expected to be loaded—8 percent fewer than the same period last year.
For the week ending April 27, the U.S. average diesel fuel price decreased 4.3 cents from the previous week to $2.437 per gallon, 73.2 cents below the same week last year.