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Freight Costs

Cosmo Lifts US, Mexican oil on Common VLCC

Japanese refiner Cosmo Oil has for the first time shipped U.S. condensate and Mexican crude on the same supertanker to reduce costs, industry sources said on Friday. U.S. condensate exports to Asia have slowed this year after West Texas Intermediate prices strengthened against Dubai crude, the Asian oil benchmark. Asian buyers have also faced high freight costs to ship oil from the Americas as shippers are reluctant to lease out their tankers on such long voyages. To reduce costs, Cosmo Oil is co-loading crude and condensate from the Americas onto a Very Large Crude Carrier which can carry up to 2 million barrels of oil. The Japanese refiner chartered the BW Opal, which loaded Mexican crude in early October, according to trade sources and Reuters shipping data. It then sailed to the U.S. port of Galveston later in October to load condensate. The journey to Cosmo's Yokkaichi refinery will take about 55 days, longer than the usual route as larger vessels cannot pass through the Panama Canal, a source familiar with the matter said. "The market is in contango so the time value has paid for some of the freight costs," he said. In a contango market, oil becomes more expensive in future months. Reporting by Florence Tan

A Call for Transportation Management Upgrades

Gerald Hoppe As Vice President and Product Owner Gerald is responsible for SAP’s solution package offerings for Logistics, R&D and Manufacturing Lines of Businesses. He holds a Degree in Computer Science & Business Administration from University of Mannheim.

Reduce the Headaches: The Need for an Upgraded Transportation Management System In 2009, the United States alone shipped more than 2.2 billion pounds of goods such as coal, crude materials like wood, sand and gravel, and primary manufactured goods (United States Census Bureau). Undoubtedly, this required complex logistical planning for companies shipping their goods and left many transportation managers with headaches

Submarines As Ore Carriers?

Russia'sNorilsk Nickel - a big metal producer -- has finished a feasibility study of a project to use nuclear submarines for ore shipments, which once started will cost $80 million, Norilsk's chairman said. "The feasibility study has been prepared and now the board of directors has to approve spending of up to $80 million for its implementation," Yuri Kotlyar said. "But even then the decommissioning of the submarines should be sanctioned by the state."

U.S. Cargo Preference Billing

The Office of the Inspector General (OIG) of the Department of Transportation released a report stating that the Maritime Administration (MARAD) is required to reimburse the Department of Agriculture (USDA) for “excess” ocean freight costs that food assistance programs incur in order to comply with cargo preference statutes. There is a dispute between MARAD and USDA regarding how to calculate the amount owed. USDA recently billed MARAD $379 million in excess freight charges

Baltic Exchange Board Backs SGX Bid

The Baltic Exchange board has unanimously backed a takeover bid from Singapore Exchange Ltd , a deal that will give SGX access to a trading platform for the multi-billion dollar freight derivatives market.   On Aug. 4, SGX offered shareholders in London's privately owned Baltic Exchange 160.41 pounds in cash per share, for a total 77.6 million pounds ($102 million), and urged them to back the deal.   The exchanges have agreed on the terms of the SGX offer

Baltic Exchange Shareholders Approve Singapore Exchange Takeover

Baltic Exchange shareholders on Monday approved an 87 million pound ($112 million) takeover by Singapore Exchange for one of London's oldest institutions, in a deal that will give SGX access to the multi-billion-dollar freight derivatives market. The proposed transaction, unanimously recommended by the Baltic's board last month, was approved by shareholders at a general meeting in the historic City of London. It will now need regulatory approval

CaroTrans Assures Seamless Transport on US West Coast

CaroTrans Logo

  CaroTrans, a leading global NVOCC (non-vessel operating common carrier) and ocean freight consolidator, today announces their U.S. West Coast port readiness program to address potential supply chain disruptions. Congestion and current labor issues are impacting the flow of cargo at U.S. West Coast ports and there is the likelihood of further instability. To address this infrastructure challenge, CaroTrans has developed alternative routing solutions to lessen the impact on supply

Cheaper Fuel to Boost Container Shipping

Photo: Tanner Matheny

Lower oil prices are sharply reducing the cost of shipping merchandise from Asia to the United States and Europe as the cost of bunker fuel tumbles. Container shipping companies deal with the volatility in fuel prices by adding a separate bunker adjustment factor or fuel surcharge to their freight rates. Fuel can account for more than 60 percent of the total operating costs of moving freight across the oceans so the surcharges are one of the most important elements of total

Cheap Freight Erodes Thai, Australian Sugar Export Advantage over Brazil

Cheap freight is eroding Thai and Australian sugar exporters' competitive advantage over Brazilian suppliers to Far Eastern markets, traders said on Thursday.   Thai raw sugar for March/April shipment was quoted at 25 points ($0.25/lb) over ICE March futures, compared with 10 points over March for Brazilian supplies.   Cheap freight costs mean that Brazilian export offers are almost as competitive as Thai offers in China, the world's top sugar buyer

Half of Hanjin Boxships Denied Port Access

A Hanjin Containership at Sea (Credit: Hanjin)

Of 98 container ships, 44 blocked from ports. U.S. firms take legal action over unpaid bills. Roughly half of Hanjin Shipping Co Ltd's container vessels have been blocked from ports since the South Korean firm's collapse, putting manufacturers and their customers increasingly on edge about the fate of cargo and spikes in freight costs. Woes for world's seventh-largest container shipper have only deepened since its banks withdrew support and it filed for court receivership this week

Freight Futures Market Avoids Tougher EU Information Disclosures

The European Union's securities markets regulator has dropped proposals to make participants in the multi-billion dollar commodity derivatives market for freight rates disclose knowledge of loading conditions, the Baltic Exchange said.  

CMA CGM Suspends Terminal Handling Charges in Ghana

Photo: CMA CGM

 CMA CGM informed its customers that the collection of Terminal Handling Charges (THC), which was introduced in Ghana on July 20th, 2016, has been temporarily suspended, effective October 4th, 2016.   CMA CGM will communicate on the resumption in due course.  

Container Shipping Market has Bottomed Out

Photo: CMA CGM

Hanjin’s receivership represents the trough of the container shipping market and despite continuing concerns of weak trade growth and fleet oversupply a gradual market recovery is now expected, according to the latest annual Container Forecaster and Review 2016/17 report published by global

Moore Stephens: 4th Straight Year of Operating Costs Decline

Richard Greiner (Photo: Moore Stephens)

International accountant and shipping consultant Moore Stephens says total annual operating costs in the shipping industry fell by an average of 2.4% in 2015.   This compares with the 0.8% average fall in costs recorded for 2014, and is the fourth successive overall year-on-year reduction

More Hanjin Ships Seized, Box Rates Surge & Shippers Fret

About 10 Hanjin vessels effectively seized at China ports; Court says plans to start rehabilitations proceedings soon. Hanjin Shipping Co Ltd vessels have been seized at Chinese ports in the wake of the South Korean firm's collapse, further roiling the industry as freight rates jump and

Dry Bulk Shipping Outlook Good

Graph: BIMCO

 The dry bulk commodity imports into and exports out of China we have seen in the first half of 2016 are very positive – and nothing short of extraordinary, says BIMCO.   But, putting it into perspective, compared to the devastating freight rate levels over the same period

44 Hanjin Ships Denied Access to Ports

Photo: Hanjin Shipping Co Ltd

 Some 44 of Hanjin Shipping Co Ltd's ships have been so far denied access to ports while 1 ship has been seized, Reuters reports quoting a company spokeswoman.   The 44 ships include instances where port service providers such as lashing firms have denied service

Freight Rates Spike after Hanjin Collapse

File image (DP World)

The cost of transporting containers from ports in Asia to Northern Europe and the United States jumped this week after the collapse of South Korean Hanjin Shipping Co Ltd. Container spot freight rates on the world's busiest routes from Asia to Northern Europe jump 36

CMA CGM Posts Loss in Q2

Photo: CMA CGM

 Ocean Carrier CMA CGM reported a net loss of $128 million for the second quarter of 2016, compared to a net gain of $156 million for the second quarter of 2015.       Its revenue declined to $3.5 billion ($3.3 billion excluding the contribution from Singapore’s Neptune

More Collapses, M&A Will Follow Hanjin, Warns Flitch

Photo: Hanjin Shipping

 Korean Hanjin Shipping's filing for receivership reflects an unsustainable supply-demand imbalance in container shipping, Fitch Ratings says.    "We expect more defaults and M&A activity in the short and medium term but these will only restore equilibrium and boost

AAPA Commends Senate Leadership For WRDA Passage

AAPA President and CEO Kurt Nagle

The American Association of Port Authorities (AAPA) today lauded leaders of the Senate Committee on Environment and Public Works (EPW) and the Senate’s Transportation and Infrastructure (T&I) Subcommittee for their success in advancing S

Toll to Build Two New Ships

Photo:  Toll Holdings Limited

Toll Group announced it is investing $170 million to build two new ships to support trade between Victoria and Tasmania and to meet the demands of continued growth.   The new, purpose-built ships, operating between Burnie, Tasmania and Melbourne, Victoria

SGX sees Baltic buy boosting Asian freight derivatives

file image (Credit: BSM)

Singapore Exchange Ltd (SGX) sees the potential to develop new freight derivatives centred on active Asian shipping routes and expand the use of freight derivatives with its acquisition of London's Baltic Exchange, a senior SGX official told Reuters.

Asia Dry Bulk-Capesize Rates could slide as Tonnage Outweighs Demand

A typical Capesize Bulker (credit: BSM)

Many vessels available for charter put pressure on freight rates. Freight rates for large capesize dry cargo ships on key Asian routes are set to slide next week as the number of ships available for charter outpaced cargo demand, ship brokers said on Thursday.

Syria Makes Major Wheat Deal with Russia

Syria's state grain buying agency Hoboob struck a deal to purchase one million tonnes of Russian wheat from political ally Russia, covering the needs of government-controlled areas for a year. The Damascus government subsidises bread for the areas it controls ensuring the supply of flat loaves

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