The strike ended sooner than investors had expected, weakening shipping stocks across Asia on Friday as freight rates were no longer expected to surge.

At least 54 container ships queued outside the ports as the strike had prevented unloading and threatened shortages of anything from bananas to auto parts. Everstream Analytics was calculated the number queuing at 4:00 p.m. ET (2000 GMT). More ships are sure to arrive. Pricing platform Xeneta said it was likely to take two to three weeks for the normal flow of goods to be reestablished.

“Remember that ships keep calling, so it’s not just a matter of handling the ships already in line, but to work extra hard to run down the congestion before supply chains are re-running,” Xeneta Chief Analyst Peter Sand told Reuters.

The International Longshoremen’s Association (ILA) workers union and United States Maritime Alliance (USMX) port operators announced the deal late on Thursday. Sources said they had agreed a wage hike of around 62 per cent over six years, raising average wages to about $63 an hour from $39 an hour.

Shares in shipping companies in Asia and Europe fell.

“Shipping stocks had previously rallied on expectations of price increases triggered by the strike by U.S. dock workers and the tense situation in the Middle East,” said Taishin Securities Investment Advisory analyst Tony Huang.

The ILA launched the strike by 45,000 port workers, their first major work stoppage since 1977, on Tuesday, affecting 36 ports from Maine to Texas. JP Morgan analysts estimated the strike would cost the U.S. economy around $5 billion per day.

Retailers account for about half of all container shipping volume, with Walmart, IKEA, and Home Depot among those that rely on the East Coast and Gulf Coast ports, according to eMarketer analyst Sky Canaves.

Bill of lading figures from Import Yeti, a data firm, show the importers reliant on the affected ports include IKEA, Walmart and Goodyear Tire & Rubber.

East Coast ports are also destinations for coffee, whose price has risen because of the disruptions.

Although the tentative deal on wages has ended the strike, the two sides will continue hammering out other issues, such as the ports’ use of automation that workers say will lead to job losses.

“The decision to end the current strike and allow the East and Gulf coast ports to reopen is good news for the nation’s economy,” the National Retail Federation said in a statement. “The sooner they reach a (final) deal, the better for all American families.”

Cargoes stuck at US ports as labor strike continues https://reut.rs/3zSu1g3

Additional reporting for Reuters by Jihoon Lee in Seoul, Emily Chan in Taipei, Tom Westbrook in Singapore, Stine Jacobsen in Copenhagen

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The BDI settled at 1,360 points on Jan. 15, dropping 59 per cent off the high of 3,346 points hit on Dec. 4, 2023, to trade at its lowest level in four months.

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.

A seasonal slowdown, reduced congestion at Brazilian ports and cancelations of some vessels headed from China to North America were all said to be contributing to the declining rates.

While bulk rates have fallen over the past month, container rates have shot higher. Drewry’s World Container Index (WCI), which tracks container rates, was at US$3,072 per 40-foot container on Jan. 11, 2024 – roughly double where rates stood at the beginning of December.

With more and more vessels diverting away from the Red Sea and taking lengthy detours there were reports of some shipping companies quoting rates as high as US$10,000 per 40-foot container from Shanghai to the United Kingdom, roughly quadruple levels only a week earlier.

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. 

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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.

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.

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At least initially, the corridor would apply to vessels such as container ships that have been stuck in Ukrainian ports since the February 2022 invasion, and were not covered by the deal that opened the ports for grain shipments last year.

But it could be a major test of Ukraine’s ability to reopen sea lanes at a time when Russia is trying to reimpose its de-facto blockade, having abandoned the grain deal last month. Shipping and insurance sources expressed concerns about safety.

In a statement, the Ukrainian navy said the routes had already been proposed by Ukraine directly to the International Maritime Organization (IMO).

The routes would “primarily be used for civilian ships which have been in the Ukrainian ports of Chornomorsk, Odesa, and Pivdenny since the beginning of the full-scale invasion by Russia on February 24, 2022.”

“Vessels whose owners/captains officially confirm that they are ready to sail in the current conditions will be allowed to pass through the routes,” the statement said, adding that risks remained from mines and the military threat from Russia.

Oleh Chalyk, a spokesperson for Ukraine’s navy, told Reuters: “The corridor will be very transparent, we will put cameras on the ships and there will be a broadcast to show that this is purely a humanitarian mission and has no military purpose.”

There was no immediate response to requests for comment from Moscow.

Deputy U.N. spokesperson Farhan Haq said: “Safe navigation for merchant shipping was one of the benefits of the Black Sea Initiative, which we hope can resume.

“The obligations of international humanitarian law on land and sea must be upheld.”

Shipping and insurance sources familiar with Ukraine said they were not informed about the new corridor and there were questions over its viability. It was unlikely most ships would agree to sail at the moment, they said.

“Insurers and their backing banks will have to agree and they may say we do not like the risks,” one insurance source said.

“The possibility of multiple seafarer deaths (in the event of a ship being hit) has not been addressed, so this is another major question,” a shipping industry source said.

Stuck in ports

Around 60 commercial ships have been stuck in the Ukrainian ports since Russia’s invasion, their fates unresolved by the deal that allowed grain exports to resume in July last year.

Many of the ships’ crews have been evacuated, leaving locally hired Ukrainian staff to help look after the vessels.

Since abandoning the grain deal, Russia has said it will treat any ships approaching Ukrainian ports as potential military vessels, and their flag countries as combatants on the Ukrainian side. Kyiv has responded with a similar threat to ships approaching Russian or Russian-held Ukrainian ports.

The United Nations has said Russia’s decision to quit the deal risks worsening a global food crisis, hurting poor countries the worst, by keeping grain from one of the world’s biggest exporters off the market.

Moscow says it will return to the grain deal only if it receives better terms for its own exports of food and fertilizer. Turkish President Tayyip Erdogan, co-sponsor of the grain deal alongside the U.N., says he hopes to persuade Russian President Vladimir Putin to rejoin it at talks this month.

“I think it will not be an exaggeration to say that President Erdogan is probably the only man in the world who can convince President Putin to return to the Black Sea Grain Initiative,” Ukrainian Foreign Minister Dmitro Kuleba told Reuters in an interview Thursday.

A German grain trader told Reuters: “People want more details about the Ukrainian temporary shipping channel announced today as it cannot work unless Russia gives a concrete commitment not to attack the ships.”

— Olena Harmash is Reuters’ Ukraine economics and finance correspondent in Kyiv; additional reporting by Jonathan Saul, Michelle Nichols, Tom Balmforth and Reuters bureaux; writing by Peter Graff.

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Roughly a quarter of all Canadian pea exports, a third of the lentils, and all the chickpeas typically move by container, with a strike by British Columbia port workers in early July hindering some movement.

That labour stoppage was resolved after 13 days, and the Port of Vancouver announced that it was “actively working to clear the backlog of ships waiting to enter (the port) caused by the recent labour strike.”

Canada has exported 1.972 million tonnes of lentils by the end of May, with Turkey the top destination at 562,500 tonnes followed by India at 501,000 tonnes, according to Statistics Canada data. That compares with 1.300 tonnes of lentil exports through May of the previous crop year.

Pea exports of 2.312 million tonnes are up by 42 per cent compared to the same time the previous year, with China accounting for nearly 1.3 million tonnes of the total. Other major importers of Canadian peas include Bangladesh, the U.S. and Pakistan.

Canada has exported 203,300 tonnes of chickpeas through the 2022-23 crop year-to-date, with the U.S. the top destination, followed by Turkey. The exports through May were well above the 136,000 tonnes that moved through 10 months the previous year.

Large green lentils are currently trading in the 56-58 cents/lb. range in Western Canada, according to Prairie Ag Hotwire data, with new-crop bids as high as 55 cents. Old-crop red lentils top out at 34 cents/lb., with the new crop only slightly lower at 33 cents.

Green peas delivered to the elevator are trading at roughly $13-$14 per bushel, with yellow peas in the $8.75-$12.80 per bushel area. New-crop pricing for the two crops top out at $13.80 and $10 per bushel respectively.

Large-calibre Kabuli chickpeas are currently trading at around 44 to 45 cents/lb., according to Prairie Ag Hotwire, with new-crop bids topping out at 44 cents/lb.

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

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“So you have cargo held in Vancouver or on its way to Vancouver, or people not shipping to Vancouver because they don’t want to pay demurrage and detention,” he said.

Demurrage is the charges paid for the use of a container within a terminal, while detention is the fee paid for the container’s use outside of the terminal.

Talks between the B.C. Maritime Employers Association and the International Longshore and Warehouse Union Canada broke down July 3 following a marathon bargaining session during the Canada Day long weekend.

With the previous five-year agreement having expired March 31, ILWU Canada said it’s seeking a two-year deal with wage increases of 11 per cent in the first year and six per cent in the second. Also, the union accused port employers of raking in record profits, while the BCMEA charged the union’s demands are unreasonable.

Talks resumed several days later with the assistance of federal mediators, but negotiations stalled a second time on Tuesday.

While pulse exports by container remained at a standstill, bulk grain carriers are still being loaded as required under the Canada Labour Code.

“The container business is being stopped right now and it is a problem, and the [federal] government needs to intervene,” Mosnaim said.

So far, the federal Liberal government has resisted demands to recall Parliament in order to quickly push back-to-work legislation through the House of Commons and Senate. The premiers of Alberta and Saskatchewan, along with some business and agriculture groups, have demanded a stronger response from Ottawa.

Mosnaim noted something of a silver lining for pulses with the port workers’ strike: summer, between the end of the old crop and the coming new crop, is a slow time for exports.

The labour dispute’s impact on Canada’s pulse exports would be far greater, he said, if it occurred in September when the new crop was being harvested.

— Glen Hallick reports for MarketsFarm from Winnipeg.

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The BDI, a major indicator of bulk shipping rates, has risen for seven straight sessions to settle Monday at 935 points, up from the low of 530 points hit on Feb. 16. The BDI had traded above 3,000 points as recently as May 2022. Increased shipments of iron ore out of Brazil and Australia reportedly contributed to the increase in the BDI.

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 such as capesize, panamax and supramax. It is often seen as a leading indicator of global economic activity.

While bulk rates have shown some improvement, container rates remained in a steady downtrend. As of Feb. 23, Drewry’s World Container Index (WCI), which tracks container rates, was at US$1,898 per 40-foot container. That marked an 82 per cent drop from the peak hit in September 2021 and is 30 per cent below the 10-year average. However, the Drewry WCI is still up from the pre-pandemic rates averaging US$1,420 in 2019.

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 reports for MarketsFarm from Winnipeg.

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A seasonal slowdown of cargo movement ahead of the Chinese New Year was seen as contributing to the latest softness, despite easing COVID-19 restrictions in the country and expectations for increased demand for commodities.

The BDI, a major indicator of bulk shipping rates, settled at 946 points on Friday, marking its lowest level in two-and-a-half years. The BDI had traded above 3,000 points as recently as May 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.

Container rates have also come down lately. As of Tuesday, Drewry’s World Container Index (WCI), which tracks container rates, has fallen by 77 per cent compared to the same time a year ago. The composite index of US$2,120 per 40-foot container compares with the peak of US$10,377 hit in September 2021 and is about 21 per cent below the 10-year average. However, the Drewry WCI is still up from the pre-pandemic rates averaging US$1,420 in 2019.

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 reports for MarketsFarm from Winnipeg.

The post Ocean freight rates falling appeared first on Manitoba Co-operator.

The Baltic Dry Index (BDI), a major indicator of bulk shipping rates, settled at 1,149 points on Tuesday, marking its ninth-straight decline and only slightly above the yearly low of 965 points hit at the end of August.

The BDI, compiled by the London-based Baltic Exchange, 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.

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.

Container rates have also come down lately as global recessionary concerns and mounting supplies of empty containers at many worldwide ports weighed on prices.

As of Nov. 17, 2022, Drewry’s World Container Index, which tracks container rates, has fallen by 72 per cent compared to the same time a year ago. The composite index of US$2,591 per 40-foot container compares with the peak of US$10,377 hit in September 2021 and is well below the five-year average of US$3,764.

— Phil Franz-Warkentin reports for MarketsFarm from Winnipeg.

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Transport Canada, in a release Wednesday, said the goal of the terminal project is to “increase the number of containers stored onsite, improve the quality of the grain-cleaning service, optimize traffic flow in the yard, and increase capacity for loading and handling containers.”

Set up in 2014 by La coop federee (now Sollio) and other investors, the CanEst facility is sited next to the port’s container terminals to receive grain by rail and truck and provide services such as product cleaning, sifting, packaging and containerizing.

The CanEst terminal, served by both Canadian National and Canadian Pacific railways, has capacity to receive over 100 rail cars and also has with 91 concrete silos, for storage capacity of 68,000 tonnes.

Federal Transport Minister Omar Alghabra and Annie Koutrakis, parliamentary secretary for transport, announced the CanEst funding a week after the final report from the National Supply Chain Task Force was released.

That report, released Oct. 6, the Task Force included a letter to the minister with an “urgent call to address Canada’s transportation supply chain crisis.”

Alghabra said Wednesday the investment for CanEst will help keep supply chains running efficiently.

The task force report goes on to list multiple calls to action, directed mostly at the Canadian government and transportation and supply chain stakeholders.

“Immediately undertake actions to ‘unstick’ the transportation supply chain,” the report’s first recommendation reads.

“These [actions] include addressing congestion at port container terminals and prioritizing government attention on regulations, policies and procedures that are impeding the effective operation of a reliable supply chain.”

Transport Canada said it considers the CanEst project a step toward addressing the issues raised by the task force.

The CanEst project will cost $18 million in total, with the federal component coming from the department’s $2 billion National Trade Corridors Fund (NTCF), which can back both public- and private-sector projects.

CanEst general manager Marc-Aurel Clapperton said the events of the past couple of years have “only deepened our commitment to streamlining the export process.”

Montreal Port Authority CEO Martin Imbleau said the project’s “favourable repercussions” will be “felt even on farms in the Prairies, Ontario and all of Quebec.”

“As Canada’s trade volumes continue to increase, investment in critical infrastructure assets such as seaports, railways, highways and roads, and airports must also increase to meet demand,” the task force said in its report.

Agriculture Minister Marie-Claude Bibeau, in Wednesday’s release, said port infrastructure is “critical” for supporting the flow of Canadian ag products.

— Hannah Polk reports for Glacier FarmMedia from Regina.

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