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Overview: USA Market

The lack of suitable tanks in the right location create additional logistic costs and pressure on rail companies to compensate for local tank shortage. The enormous demand for tanks on the US West Coast is not supported by big terminal projects since the permit approval and investments involved to get such terminals up and running are too high. A missed opportunity for the US to improve their import/export and support their economy by reducing logistic costs.

The market for specialty products is tight in the HUB ports like Houston & New York. Stainless steel or dedicated lines is not easy to find. In the range Mississippi River – Baltimore MD we see quite some opportunities. West coast is even more tight, for any kind of product it is hard to find a tank. The US contracts tend to be longer than in Europe. 3-5 year terms is quite standard versus 1 year with rolling options in Europe. With the tightness in the market I expect that longer term contracts will be the future, as terminals will need such a commitment in order to modify or build tanks to accommodate such demand.

On the products side, we see that fuel oil contracts peaked at the end of the year. It was to expect that everybody was waiting for everybody and once tanks were contracted, nobody wanted to miss out and suddenly the IMO 2020 rush started. As a trader or supplier you want to be prepared for next year’s change and have the tanks to either blend or store the different Sulphur grades. Although it might seem early days, but nobody wants to risk to be left empty handed.

Gasoline is painful just now. No money is made and storage is always a costs you don’t want to have when the product prices and flows don’t support it. However you don’t rent tanks for a month but for year(s), so the risk to lose money is there. Renewals tend to be done at slightly lower numbers in order to support the customers.

Diesel business is still fairly slow, although for special grades with high Sulphur for example or smaller tanks, it is still hard to find the right solution.

Overview: Caribbean Market

We see a lot of capacity available on the islands and in Columbia / Panama. The rates still tend to be about double of the New York Harbour, which really surprise us. With the low occupancy you would expect lower numbers, especially since the Islands mean double handling (small local markets).