Bulk ocean freight at highest level of past year

Container freight rates seen softening

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Published: October 19, 2023

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Loading grain on a vessel at a Burrard Inlet terminal. (Maxvis/iStock/Getty Images)

MarketsFarm — Ocean freight rates have shown some strength over the past two months, with the Baltic Dry Index (BDI) at its highest level of the past year.

The BDI, a major indicator of bulk shipping rates, settled at 2,058 points on Tuesday, marking the first close above 2,000 points since July 2022.

The BDI is compiled by the London-based Baltic Exchange and provides an assessment of the price of moving major raw materials by sea. The overall BDI includes sub-sectors for the different classes of ocean vessels — including capesize, panamax and supramax. It is often seen as a leading indicator of global economic activity.

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While bulk rates have trended higher, container rates have softened in recent months. As of Oct. 12, Drewry’s World Container Index (WCI), which tracks container rates, was at US$1,369 per 40-foot container (about C$1,878). That marks a 60.7 per cent drop from the same week a year ago and comes in at four per cent below the 2019 pre-pandemic average.

Canada is at a freight disadvantage compared to its competitors exporting grains and oilseeds into many markets, with lower freight rates helping counter that disadvantage.

— Phil Franz-Warkentin is an associate editor/analyst with MarketsFarm in Winnipeg.

About the author

Phil Franz-Warkentin

Phil Franz-Warkentin

Editor - Daily News

Phil Franz-Warkentin grew up on an acreage in southern Manitoba and has reported on agriculture for over 20 years. Based in Winnipeg, his writing has appeared in publications across Canada and internationally. Phil is a trusted voice on the Prairie radio waves providing daily futures market updates. In his spare time, Phil enjoys playing music and making art.

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