New Crop / Harvest
Harvest so far has been, in a word, weird. After a fairly robust summer, new crop, while still an increase in volume, hasn’t been as frenetic as we have seen in the past. With China still on the sidelines and Taiwan still taking bulk vessel, the main markets are SE Asia, India Sub., Australia and Middle East. While these markets still represent good volume opportunities, the Transpacific markets in particular all require transshipments. Since the carrier networks in the Pacific are so North Asia centric on the head haul it is causing transshipment bottlenecks, while excess capacity remains on the ships to China. As a result we see carriers inching up their transship rates (which we expect to continue in moderation over the coming months), meanwhile, they are remaining aggressive on their head haul destinations.
Overall we are slightly bullish freight overall, due to where the demand is coming from. A huge question mark remains fuel and specific Low Sulphur implementations. Of late, US Crude has declined about 20% since the beginning of October due to a supply glut. The Saudis’ response seems to be a cut in production in December to push prices back to about the $80 level which they think is sustainable.
Please contact your MAC Container Rep for any comments / questions and if you have any needs we can assist with.