Ocean Freight
The shipping market remains very tight. Shipping is extremely heavy, not just for steel but for all commodities. Procuring vessels is getting increasingly difficult.
Since last month, steel transportation rates for Handymax vessels coming from East Asia to the US have gone up by $5 /mt to $10 /mt.
Rates for ships traveling the Atlantic are poised to go up as well.
Going rates for Handymax ships carrying large tonnages of steel (minimum 15'000 tons of hot rolled coils,
rebar,
wire rod, etc.) are as follows:
Baltic to US East Coast: $40 /mt to $45 /mt
Baltic to US Gulf Coast: $35 /mt to $40 /mt
Black Sea and Mediterranean Sea to US East Coast: $40 /mt to $45 /mt
Black Sea and Mediterranean Sea to US Gulf Coast: $35 /mt to $40 /mt
East Asia to US Gulf Coast: $60 /mt to $65 /mt
East Asia to US West Coast: $50 /mt to $55 /mt
Port Issues
US ports, particularly on the East Coast, are experiencing tremendous congestion, with some ships having to wait in line to get unloaded for up to two to three weeks -- at premium costs. Warehouses are full and it is still very difficult to find inside storage space at ports.
The situation at the Port of New Orleans has not cleared up at all, as there is still extreme congestion and a lack of skilled laborers to unload cargo. At this point, it is an extraordinarily difficult destination to ship to. Customers report exorbitant costs and that stevedores are refusing to unload less-than-interesting cargo. It does not look like this integral port will go back to "business as usual" any time soon.
Barge Transportation
Barge availability is still tight, as it is experiencing the same short supply / high demand scenario that the ocean
freight market is experiencing.
The fuel surcharge for barges is now 27 to 30 percent.
Rail Transportation
Availability of rail cars is still very poor. Profits for the major railroads are up, however, and more money is being invested improvements to the railroads, including improvements in infrastructure, locomotives, and improving the railroad itself. Railroads are also working on making the network more fluid and decreasing the time it takes to empty and load cargo. With railroads focusing on velocity and decreasing load time, we should see an increase in available equipment.
Industry experts predict that Union Pacific, who this week posted an an all-time high quarterly revenue of $3.5 billion, will soon raise rates by 20 percent.
The fuel surcharge for rail cars varies depending on the carrier, but the average is about 13.5 percent.
Truck Transportation
The trucking industry is still very tight, with a shortage of trucks and also a lack of available drivers, as many drivers are exiting the trucking industry.
Diesel prices are soaring, and the trucking fuel surcharge is significantly higher than it was last month.
The national average trucking fuel surcharge is around 18 percent. On the West Coast, the fuel surcharge ranges from around 20 percent to 23 percent.