Ocean freight rates hit all-time high
Baltic Exchange bulk dry freight index hits new
By Dave Hannon -- Purchasing, 4/27/2007 8:15:00 AM
The cost of shipping dry bulk commodities hit an all-time high on the Baltic Exchange Index today, as demand for ocean freight continues to outpace existing capacity.
The daily index, which tracks charter rates for dry bulk carriers on 26 of the world’s key trading routes, hit the all-time high of 6320. The previous peak of 6208 came in December 2004.
In a statement, Baltic Exchange CEO Jeremy Penn said the lack of available capacity is the main reason for the increase in rates. China’s demand for iron ore and coal has not only gobbled up much of the capacity in the Pacific, but also forced countries like Japan and Korea to source materials from other regions and ship longer routes.
As of Friday, the average daily cost of hiring a capesize vessel capable of carrying up to 172,000 tons of cargo reached at $106,289 whilst panamax vessels capable of 74,000 tons of cargo are being chartered on average at $47,100 per day.
Also see: Ocean freight rates and demand remain stubbornly high
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