North American transportation and logistics

Ocean Freight Since last month, freight rates for Handymax ships coming from East Asia into the Gulf and West Coast have continued their upward ascent, increasing by $10 /mt. These rates are so high and availability is so tight that experts predict reduced import volumes in the third quarter. Rates for vessels coming from the Baltic Sea have stayed flat since month, while rates for ships coming from the Black and Mediterranean Seas have fallen by $5 /mt. 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: $35 /mt to $40 /mt Black Sea and Mediterranean Sea to US Gulf Coast: $30 /mt to $35 /mt East Asia to US Gulf Coast: $70 /mt to $75 /mt East Asia to US West Coast: $60 /mt to $65 /mt Port issues The Port of Houston has been very congested for the past two weeks, as they are getting a lot of traffic that is being diverted away from New Orleans. The situation at the Port of Houston should ease by the end of May, but right now there are ships in Houston that are looking for homes. Although the Port of New Orleans has advertised that they are at 100 percent capacity, it is still a very undesirable location to ship to, and the congestion and labor shortages have only intensified since last month. Most stevedores don't want to do mid-stream unloading anymore and there is not enough experienced labor available to do the job. Ships aren't being unloaded for up to three to four days, racking up to $15'000 in surprise costs for importers. Besides the Port of Houston, many ships are now being redirected to Mobile. Ports on the East Coast are congested too, particularly in Philadelphia, Baltimore, and Camden. Ships are being diverted from Camden into New Haven. Barge transportation Barge availability is still tight, though experts predict that the market will ease up by July. Depending on the carrier, fuel surcharges for the third quarter will range from 40 to 50 percent, a large jump from second quarter prices which customers will certainly not be very happy about. Rail and truck transportation There are no major new developments in the rail or trucking industries since last month, but the both markets are still tight and the fuel surcharges are still rising. The average fuel surcharge for rail cars in the US this June will be 15.0 percent. The average fuel surcharge for truck transportation in the US is up to 19 percent.