North American transportation and logistics

Ocean freight Steel shipping rates for ships coming from Asia and the Atlantic are on the rise again, due to strong demand. The Atlantic market is now just as strong, possibly slightly stronger than the Pacific market. The typical slowdown that takes place during the summer months does not seem to be happening this year. Market experts predict ocean freight rates will continue their ascent, all the way through the fourth quarter. The rising fuel bunker and the soaring freight futures market are also factors that are causing prices to rise. The freight futures market, played mostly by vessel owners, has caused rates to go up because market players have speculated that the price of ships will be much higher at the end of the year. It is a self-fulfilling prophecy, prompting a lot of operators to charter ships for long-term activity and continues to fuel higher freight rates. 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: $45 /mt to $50 /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: $63 /mt to $69 /mt East Asia to US West Coast: $59 /mt to $64 /mt Port issues There are still record numbers of imports flooding US ports, all from orders fixed in March and April. The Port of Houston is still particularly congested, with very limited inside or outside storage. All of the terminals are very busy and you can no longer ship to your preferred terminal. Some of the favorite ports have as many as 20 ships lined up for the next couple of months. East Coast ports, on the other hand, are not experiencing as many delays as they had been, and the situation has become a lot more manageable. Barge market Barge rates are up, as the grain season has started and is projected to be quite strong this year. Spot rates for barges have increased dramatically, ranging from $20's /nt to Chicago, and in the mid-$20's /nt for barges to Cincinnati and upper Ohio destinations. Availability is still OK, but will tighten until the market peaks in September. Most carriers' fuel surcharge range from 30 to 45 percent. Rail/Truck Railcars and trucks are still hard to find, and rates are up. The fuel surcharge for rail cars is currently 16.5 percent, and will be approximately 17 percent in September. The fuel surcharge for trucks is currently at 20 percent.