MarketsFarm — Strong demand to move cargo coupled with weather-related shipping constraints in a number of key corridors has helped take ocean freight rates to their highest levels in more than a decade.

The Baltic Dry Index (BDI), a major indicator of shipping rates, settled Friday at 4,275 points, marking its highest level since November 2009. The index hit a low of 393 points in the spring of 2020 when the COVID-19 pandemic first started disrupting global movement.

The panamax index was up for its seventh-straight session, hitting 3,904 points. Average daily earnings for the 60,000- to 70,000-tonne vessels that commonly carry grain or coal were pegged at US$35,138.

The BDI is compiled by the London-based Baltic Exchange and provides an assessment of the price of moving major raw materials by sea. The overall BDI includes subsectors for the different classes of ocean vessels, including capesize, panamax and supramax.

Canada is at a freight disadvantage compared to its competitors into many markets, with higher freight rates heightening that disadvantage.

Canadian grain exports through the first six weeks of the 2021-22 crop year are running well behind the previous year’s pace — although tight supplies of most major crops due to the Prairie drought likely have more to do with the current slowdown than the high rates.

— Phil Franz-Warkentin reports for MarketsFarm from Winnipeg.