Ore buyers prefer to handle own shipping arrangements

Ore buyers prefer to handle own shipping arrangements With dry bulk freight rates plummeting, more iron ore buyers want to arrange transportation themselves, said an Australian iron ore producer.
   Fortescue Metals Group said Friday that as a result it has “exercised suspension of all of its long term CFR (cost and freight) shipping contracts of affreightment and consecutive voyage contracts on the basis of unforeseen circumstances.”
   To date, the company said about two-thirds of its sales have been on CFR terms where it arranged loading and transportation and discharge at the port of destination.
   But Fortescue said it expects that sales on CFR terms will sink to about one-third of its sales and most customers to prefer FOB terms where the customer arranges its own transport from Fortescue’s terminal at Port Hedland.
   “The changed arrangements are in direct response to market conditions demanding greater FOB sales,” said a letter from Rod Campbell, Fortescue company secretary.