Losing less does it mean gaining more?

If we read the other way round, we can find some nice stories and good reasons to believe that our drybulk shipping market is getting much better. See Scorpio who’s declaring a loss of  only USD25m for 2016 second quarter, knowing on the 1st quarter they declared a loss of more than a double, ie USD 58m. Being positive and not being mean, really, then they improved their performance fairly drastically and let’s believe these results are achieved thanks to a better management of their costs and better daily hire obtained on their fleet, in their financial report they are mentionning:

Recent Significant Events

TCE Revenue Earned during the Second Quarter of 2016

  • Our Kamsarmax fleet earned $5,263 per day
  • Our Ultramax fleet earned $5,335 per day

Voyages Fixed thus far in the Third Quarter of 2016

  • Kamsarmax fleet: approximately $6,611 per day for 45% of the days
  • Ultramax fleet: approximately $7,153 per day for 55% of the days

You can also find a summary of their financial report here — franckly speaking too much figures for me!–

Bmti -or others- are wondering why Google or Amazon are starting to sniff around and start to consider  entering into the shipping industry. For Amazon, it’s easy to believe the one of the key off their business is logistic. It’s therefore also fairly easy to believe, view the depressed shipping market, Amazon can start to operate their own ships with a entering price into our industry being fairly low. For Google, eventhough I’m not quite sure how Google can leverage their expertise in shipping, I don’t see any reason why Shipping shall be out of the numeric process. Also to try to provide an answer to BMTI stating about Google and Amazon “The german press, instead of approaching shipping people for comment, approached PWC […] we recommend Amazon and Google to get in touch with Scorpio before sticking their neck out”.  Well, I’m sorry to say, but I don’t see any Owners able to bring a kind off analysis which is proposed by PWC here. transport & numeric – I have not read it all yet, but I’ll do- but this kind of survey is probably what lead Google or Amazon to approach PWC rather than any great Owners. Also we can easily assume, getting into shipping does not only mean necesseraly becoming an owners. And we shall not forget Google and Amazon may also be quite interested in our shipping expertise to find tax heaven territories as Northern Ireland or Luxembourg are about to show their limits.

Having said the above, Handies remains the most resilient size on the chartering market and is the only one keeping going up, going into details, with today’s index which are asf

  • Skaw-Passero trip to Rio de Janeiro-Recalada 28000 4510 +90
  • HS2 Skaw-Passero trip to Boston-Galves ton 28000 4904 +221
  • HS3 Rio de Janeiro-Recalada trip to Skaw-Passero 28000 6524 -51
  • HS4 US Gulf trip via US Gulf or north coas t South America to Skaw-Passero 28000 7600 -25
  • HS5 South Eas t As ia trip via Aus tralia to Singapore-Japan 28000 5221 +21
  • HS6 South Korea-Japan trip via North Pacific to Singapore-Japan 28000 6043 +7
  • Weighted Time Charter Average (HS1, HS2, HS3, HS4, HS5 & HS6) 5758 +36

The routes value movements clearly showing on the Atlantic side a change on the back/front haul concept with the origin Skaw Passero being the place to be for owners looking after money. Going further, for the skaw-pass to Wafr charterers, they have the double pain. Origin is where the market is, ECSA is where owners don’t want to go. Hence, charterers have 1st to find a ship keen to go to WAFR, once found, they have to consider to pay a premium as ballasting to ECSA is, for time being, the losy place.

Also in such market where a penny is a penny and to try to outperform Scorpio results, traditional owners are deeply considering to play around on the demurrage/despatch. With today’s information being available with a couple of clicks, owners managing to know if the trade proposed are despatch or demurrage business. And they do not hesitate to ask for different conditions  at load and at disch in order to ask for what’s in their advantage. Despatch being usually introduced to owners asf “Mate, be happy, your ship will be back on the market quicker than expected if we are able to manage to load/disch quicker than the contract says, quicker than expected means you’ll be able to chase for the money quicker”… today owners, even when open in continent/baltic are not really bitting this incentive anymore and the longer the ship stay busy, the better.

On the grains as we are in the harvesting process in northern hemisphere

  • from continent, it’s an open secret now, the wheat crop which is currently harvested in France is showing very deceptive results in terms of quality and quantity especially in the northern part of France. As a result in terms of shipping, the European Atlantic facade (French atlantic basically) is likely to become a quiet area (at least on the wheat and in the few weeks to come) and traders, unless they are finding solutions, will have to consider Baltic or blsea origin for their wheat. For sure so far in France only 17% of the wheat is harvested, same time last year it was 53% (source FranceAgrimer)
  • Canada is said to expect a lovely grain production and for once the logistic there (rail companies) are declaring to be fully ready and dedicate to ensure the grains to go from the fields to the silos/ports with the whole efficiency we can expect. See more info here canada
  • from Blsea, we can read rumors about the russian wheat tax export being cancelled

and generally speaking, should you wonder about the quality of the wheat you aim to load in your ship, find here an interesting analysis

remaining at your disposal once I have bought my baguette or fixed my super short period on which I’m still working


Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s