The U.S. Department of Agriculture's latest Grain Transportation Report reveals a decrease in wheat transportation costs to Japan for the fourth quarter of 2024. The report, released on April 3, 2025, highlights changes in shipping expenses for both Pacific Northwest (PNW) and U.S. Gulf routes.
Transportation costs for wheat shipped from Kansas and North Dakota to Japan via the PNW decreased by 2% and 1% respectively compared to the previous quarter. The decline was primarily due to lower ocean freight rates, with the Kansas route also benefiting from reduced rail rates.
For Gulf routes, transportation costs fell more significantly, with a 7% decrease for shipments from Kansas and a 6% drop for North Dakota. These reductions were largely attributed to falling ocean freight rates, which declined by 14% quarter-to-quarter and 16% year-over-year for Gulf routes.
The report cites several factors contributing to the lower ocean freight rates, including slowing global economic growth, higher vessel supply, and a seasonal dip in cargo demand.
Total landed costs for shipping wheat to Japan decreased across all routes, both quarter-to-quarter and year-over-year. The declines ranged from less than 1% for PNW routes to 2% for Gulf routes compared to the previous quarter. Year-over-year reductions were more substantial, ranging from 10% to 19% depending on the route.
Despite the overall decrease in costs, U.S. wheat inspections destined for Japan in the fourth quarter of 2024 remained relatively stable, increasing less than 1% from the previous quarter but declining 10% compared to the same period in 2023.
The USDA projects wheat exports for the 2024/25 marketing year to reach 22.73 million metric tons, an 18% increase from the previous year, reflecting increased shipments to Latin America and Asia.
