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.
