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Low freight rates and other factors lead to grain vessel backups

Excerpts from an article in the Western Producer titled ‘Ocean vessels again backed up at Pacific port’:

According to figures published by Canada’s Grain Monitoring Program (GMP), the number of ocean vessels waiting to be loaded with grain at the Port of Vancouver in late April stood at 24.

That’s at least double the historical average for that time of year, according to the GMP.

Mark Hemmes, a grain transportation expert whose company collects GMP data, says the reasons for long vessel lineups at Vancouver include cheap ocean freight and lack of logistical coordination.

“The No. 1 reason is that they don’t have the right grain arriving at Vancouver in a sequence that matches the arrival of vessels,” Hemmes said.

“But you also have to (consider) … that ocean freight right now is at record low levels,” he added. “If you took a 10-year average on what a Panamax freighter should go for on a daily basis, it would probably run somewhere between $20,000 and $30,000 a day. Right now, Panamax vessels are at around $4,900 to $5,500 a day … It’s dirt cheap.”

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