la vie en rose with your ford Pinto

Timing is everything – or almost everything- in our industry right. We can tell the ‘State of the Market – Commentary from a dry cargo broker’– section proposed in today’s BMTI edition is kind off wrong. In summary our fellow broker, is very close to buy a rope and hang himself , to end up with his tough broker’s life. Allow me then today to write down a letter to my fellow old broker who seems to be about to commit irreversible decision.


Letter to a friend broker

Buddy, if you’re reading me, DON’T DO THAT. It seems you’re very well experienced in the Industry, as you’re saying « The number of young enthusiastic people in the sector is a fraction of what it was 30 years ago ». So I guess you’ve been in the industry for at least 31 years, this means you have a great, huge and priceless expertise. You’ve been through the « Millenium bug clause » which we can see in some nice Nype Cp, you can remind to the youngsters you harshly negotiated this Bimco wording, and I’m sure you successfully did it. For the young fellows who’ll read this open letter, below this Bimco Clause :

« Year 2000 conformity’ shall mean that neither performance nor functionality of computer systems, electronic and electro-mechanical or similar equipment will be affected by dates prior to or during the year 2000. Without prejudice to their other rights, obligations and defences under this Charter Party including, where applicable, those of the Hague or Hague-Visby Rules, the Owners and the Charterers, and in particular the Owners in respect of the Vessel, shall exercise due diligence in ensuring Year 2000 conformity in so far as this has a bearing on the performance of this Charter Party. » It was challenging .

Come on Buddy, you need to see « La vie en Rose » :

  • Do you really miss the telex ?
  • Do you really miss the currency conversions, from schillings to Deutchmarks, from Drachmes to US Dollars ?

(If you really miss it, you can still play with your abacus once you have fixed the ship and convert into « old francs ». You’ll realize your commission is worth millions (monkey money, but still millions)).

  • Do you really miss your Ford Pinto ?

Dude, open your eyes, the shipping sector needs people like you. To the contrary, there are lots of young guns, entering into the market, with fresh eyes, naive questions and full of creativity. They need you. Try not to be too boring and try to avoid these kinds of words « in the old days, shipping was… » as we all have to admit, it is truly quite boring to hear these. But entertain them, tell them you remember having fixed a ship, in a public phone, while you were en route to the port to ensure your 1947 built lady were trully as described. Tell them, at that time you were driving your Ford Pinto, tell them you were having 5 assistants helping you to handle the whole picture. Imagine, now on your own, you do 5 people jobs. You do it because you’re great.

Look at the Handy market, it’s on the way to recover, forget about the Capers, they are anyway boring, and 30 years ago, these ships were not existing anyway. Focus on the Panamaxes or on the BHSI, let’s believe BHSI is still on the way to the moon (or so), lead by the HS3 heading close to 7000$ daily. Look at that

  • Mv ’Western Boheme’ 2012 37000 dwt dely Vitoria prompt trip redel Black Sea dur 50 days approx $8500 daily –

Look also this fixture

  • ‘Western Tosca’ 2013 37’194 dwt dely Baltic prompt trip redel Florida $7,000 daily – PacShip »

would you have bet one single cent 10 days ago on this Baltic to USEC being worth more than $6’000 ?

This fixture also, few months ago, the freight was wondering whether it should stay above 20usdpmt or shall go for a visit in the 19’s…

  • ‘Ultra Dwarka’ 2012 50000 /10 hss US Gulf/N China 0 1/10 No v $31.50 fio 10000 shex/8000 shex – Cofco Agri

Look, even the big guys like Dreyfus or Cofco seems to have decided to give a hand to the market  Stop listening to the experts, they are always wrong. They were wrong in 2007 when they were saying « sky is the limit ». As we say, « fool me once… ». The market revival is now, it’s today !

You’re great, we love what you do,we love who you are and please stay with us.

Your friend Jerome

Ps : if you really really really want to leave the industry despite this letter, before closing the door please send me details of your exclusives principals so I can call them and try to get into your path.


when you commit Joint-Venture, how the wedding party shall look like?

For sure we can see on the index and on the physical market there is a shift going on on the handies. Today’s BHSI value is at 6’134, +70 and a focus on the Atlantic routes is :

  • showing a revival on the ECSA, which is gaining today again close to 500usd/daily (with yesterday’s it makes close to +1’000 in 2 days).
  • HS3 value now surpassing the HS4, HS4 being also in a positive mood.
  • HS3 has not been above 6’600USD daily since mid July this year.
  • HS4 is back above mid August level

On the other side, which is not reported on the indexes, the Continental origin, on the handies remains fairly quiet with very few grains enquiries seen but Owners can hope to find Fertz ex baltic or West med towards USG or ECSA enabling the market to sustain at -or close to- the levels seen beginning of October. Continental value is anyway not declining, as ships are anyway attracted by the Black Sea area which is a fairly good shape. We heard a Handymax got fixed passing Canakkale at 9kusd daily + a ballast bonus for a stem via black Sea to end up in Continent. With HS3 and HS4 showing now some good signs of recovery, owners open in Gibraltar will now have in their plates the option to consider a round voyage via USG, also cargoes heading to West Africa might be seen in the close future as worth to be considered. Are these movements only to be considered as technical adjustments or as fundamental changes remain an open question.  Time will tell, but none of us shall forget that slowly, but surely we are entering in the Northern Continent in Winter time, meanings ships being able to load only basis their winter marks. We shall not forget neither Owners will, as long as they can, try to insert bit more of weather days in their calculations to make sure they remain on the safe side when it comes to their calculations.

Fundamentally, we keep seeing owners being sent on the sideline. Flinter is one of those. See the link here Flinter can say thanks to the bank. Some others are going in Joint-Venture to go for another start, see Gearbulk and Grieg Star wedding announcement here is JV looking like a wedding?.  With a combine fleet of more than 130 bulk ships, the new entity is getting into short list of the happy few owners handling more than 100 ships, let’s believe they did not chose ING bank to finance anything, if anything has to financed.

Finally, JV seems to be a fashionable process today in Shipping, if you’re wondering why you should (or should not) consider to go for a Joint Venture, pleased read this one here. Once you have the ideas bit clearer then the next question will be, who’s the bride?

We can talk about that privately if you prefer.


Canal promotion. Keep things simple

If somebody can explain me, I would love to understand how this can work :

Today’s (dated 8th oct) BHSI states

  • +4pts heading to 417,
  • when HS3 (ECSA to Skaw pass) is making a massive gain of +500points. (Yes today + 500 is kind of massive), it’s about + 8% in one day, heading to 6161usd daily value
  • When HS4 (usg Ncsa to Skaw pass) is gaining +164, heading to touch below 6500.
  • Other route are lossing from 7 to 40 points.

I fear I understood on my own, the weighted average is somehow offsetting the gains seens on the HS3 and HS4.

In the meantime, on the physical side, we can see ships waiting for almost 10 days before tendering NOR in ECSA and charterers open these routes are still seeing quite sharp figures. Maybe this fixture reported ‘Assimina 11’ 20 0 7 30 54 1 dwt dely New Amsterdam prompt trip redel Black Sea $7,500 daily – Oldendorff, New Amsterdam, as all of you know is in NCSA is a first signal for a change in Handies from East Coast Altantic.

Ex USG, is there a weather effect to get these figures, owners being concerned with storms and typhoons ? Complete opposite is reported in BMTI, « handy bulk viewpoint section », bmti quote « Atlantic market is down to fairly unexciting levels ». I try never to say this but I guess the coming days will be interesting to see. If there is a real upward trend or if the figures seen today on these routes are somehow announcing a revival. For time being, usual game. Owners seeing market being on fire, while charterers feign not to have seen anything looking like an upward. From the continent Grain activity …

Anyway, I’m just realizing I’m trying to write down clever things and it seems today I won’t make it.

So, let me just share this one with you

I’m wondering if the content is interesting or funny or just out of purpose or if I misunderstood everything (might be all of those)!

While reading :

  • « the Suez Canal Authority is in discussions with a number of the world’s leading containerlines in a move that could intensify the battle for business the waterway is fighting with the expanded Panama Canal. »

One shall warn Suez Canal Authority, the containerlines business is in the middle of huge changes and they shall be well advised to be sure who they are talking to. Who can say which companies are going to be still here tomorrow ?

Then reading :

  • « Egyptian authorities are pushing for the largest lines including Maersk, MSC and CMA CGM, to sign up to a new pricing structure where discounts are offered if the shipping firms agree to pay for three years in advance rather than the traditional model of individual transit contracts. »

Who is a volunteer to explain to Egyptian Authorities, main issue which is faced by Containers players is the lack of cash ahead of them ? And I would be very surprised (but I might be wrong), any of these Companies will jump on a Million USD deal (even if it’s a real bargain) paying three years in advance knowing these companies have surely no clue which is the number of Suez Passage they’ll have to buy and what will be the structure of the routes in the months to come.

Then reading as a conclusion

  • “The canal had been attracting greater business from boxlines heading from Asia to the US East Coast prior to the opening of the expanded Panama Canal earlier this year. However, the revamped Central American waterway has since clawed back most of this traffic.”

Finally the battle between Suez and Panama canal is in the air. Sure the timing of these new set up is completly wrong and we can surely assume tomorrow’s decision whether to go through Suez or Panama or the Capes is led by economics but also time saved, bunker burnt, committments to « quick deliveries » shipping companies may make to get competitive advantage and quite a lot of various external needs. Who knows, one day a new Environment law might come in and force shipowners to go through the quickest route (ie through the canals) to minimize gaz emission… If such is coming in, what’s the point to make a Canal passage promotion ?

If I may suggest something bit more simple with immediate effect to Suez Canal Authorities, guys go for a promo, like the Pizza, “buy 1 get 1 for free”.

Keep things simple, it works for the Pizza (and coffee)



let’s believe it works for shipping.

Have a nice evening and Dear Canal Authorities, you’re welcome


Tough to be a ShipOwners nowadays

What’s hot today ?

Let me try in the next days, to come back and comment the Bimco Report dated 6th october which again is full of good information and their analsysis, eventhough I strongly believe it can be discussed on some points is in any case worth to comment.


Let’s start with this assessement made by BIMCO :


The current industry model in dry bulk shipping is characterised by very fragmented ownership of the 10,800 ships in the global fleet. There are only four companies owning more than 100 dry bulk ships and on a DWT basis, the largest owned fleet represents less than 4% of the total fleet. This means that each individual owner has very little influence and bargaining power with its customers and is often reflected in low levels of mutual trust.

Many shipowners in dry bulk shipping today have highly leveraged fleets and are focused on the asset play (buy low, sell high) rather than acting as logistics providers focused on return on capital employed. The asset play is a high risk business model especially when it is combined with a high proportion of ships on the spot market.

There are owners who are more conservative and had a strategy of running many of their ships on long term charter. They have been caught out by the length and severity of the downturn with most, if not all, of their long term charters now expired. Today, when the dry bulk shipping market is scraping the bottom, locking ships into loss making time charters is not an attractive option for the owner.



You might have seen, or not, the resignation of Peter Georgiopoulos from the position of chairmanship of Genco Shipping & Trading. Genco, being listed on the NYSE, is one of the big public Companies owning and running ships. But how big is Genco and what’s Genco strategy is looking like ?

They own a fleet of 70 vessels with an average age of 8.8 years and an aggregate carrying capacity of approximately 5,159,000 dwt, consisting of 13 Capesize, 8 Panamax, 4 Ultramax, 21 Supramax, 6 Handymax and 18 Handysize vessels and are expecting (if not done yet) the  delivery of 2 Ultramax newbuildings (source Genco’s website). Still according to their website, and last published financial report, in August 2016, at that time none of their ships are operated internally on the spot market, they do not charter in ships to operate them but to the contrary, all the ships are under medium or long period to third parties. As mentionned by Bimco in their last report, Genco can be defined as an asset player more than a logistic provided. Few of the ships, 1 panamax, 10 supras and 10 handies are under pool management either with Clipper or Bulkhandling… In this tough time, and seeing, still in their financial report, which you can easily find on your own, for sure it could not last for ever without investors injecting USD 125Million in the group. Few example of what’s reported in their financial report

  • a period on the 2009 built caper Genco Maxiumus at $3’250 daily (with 50% profit sharingCaper) until March 2017,
  • Panamax Genco Vigour built 1999 at 95% of the Bpi daily until dec 2016
  • Genco Predator smx built 2005 until oct 2016 at 98.5% of the BSI
  • Baltic Jaguar, smx built 2009, redelivered on august 2016 after making $3’000/day during 35days

Fixing on period at index level is prooved now to be probably a mistake. Knowing the Supra average net daily value in 1H16 was at US$’4570 (-27% vs previous year), on the Handy it is down to US$3’900 daily (-22%).

Sure, Genco’s board of director did their absolute best, but nobody (or very few) is cleverer than the market, and financial result passed on Aug 2016 were showing a net loss of $110.7 Million for the 2nd quarter of 2017, for the 1st half of 2016, the total net loss is down to Usd164.8million, when previous year, on same period, the loss was at usd131Million.

As a comparison, in terms of size and strategy, PacificBasin (source their interim 2016 report), is controlling 212 drybulker, including 87 owned, and is mentionning 58% of their 19’420 handysize revenue days for second half 2016 is covered at usd 7’670/day net. Remember, 1st half of 2016 daily handy spot rate was at US$ 3’900. Financially, PacificBasin on 30 june 2016 loss is « only » at 49.8M US$, when same period in 2015, the Company were showing positive result at +5.8MUS$. PacificBasin seems to be in between from Genco’s set up and Oldendorff (to name one).

Oldendorff’s not public, so no financial results available, but Oldendorff is having something like 500 ships on the water, with a quarter, ie 125, being their own fleet for a total of dwt capacity of 45’000’000. Oldendorff, strategy is clearly to be a logistic provider and a quick look at Oldendorff’s website is clearly showing that delivering goods from port A to port B with proposed taylor made solutions is their goal.

With these 3 examples, you can see from 3 big players in our Industry what’s Bimco is describing in the ownership set up. For sure, whichever the size of the ownership company, whichever the strategy, our industry is badly lacking of cash. I don’t know if mister Peter Georgiopoulos is a billionnaire, or if he used to be, or if he will be. I’m not much concerned about his financial health, I was also reading a report today about billionnaires. They’re getting poorer, on average having « only » 3.7BUS$ in their pocket, when last year on average it was 4billionusd each. Going further in this report, billionaires who made their fortune in the commodity markets are the ones who saw their fortune dropping the most… Cash for shipowners will have to come from elsewhere !

If you really need to have spot chartering market information, you can still give us a call or drop an email or a skype or an instagram and I’ll be pleased to share my point of view and analysis on what we do/see/hear.






International’s burger day. the good news in shipping today

If you’re wondering what’s going on in the Great Lakes, being quite a specific market, here below a summary of the activity year to date compared to 2015, (source Great Lakes Seaway Partnership)

  • « The St. Lawrence Seaway reported that year-to-date cargo shipments for the period March 21 to September 30 were 21 million metric tons, down 5.32 percent over the same period in 2015. The dry bulk category was down 11 percent. Iron ore was down 13 percent; coal was down15 percent. While the general cargo category was down 3 percent overall, steel slabs and other general cargo were up 41.5 percent and nearly 6 percent respectively. »

But this would not be fair to remain on these mainly « down » figures, as the same report is also stating

  • « Notable increases were reflected in the export of wheat, corn and soybeans from the U.S. Ports of Duluth, Milwaukee and Toledo during the month of September,” said Betty Sutton, Administrator of the Saint Lawrence Seaway Development Corporation. “The good news is that we anticipate that trend to continue for the remaining three months of the 2016 navigation season.”

So, reading between the lines, if you are planning to move grains from the Lakes in the remaining 2016 months, and you’re not covered yet, it would be wise to start working on your shipment, now.

On the index, today’s BDI is falling back below the 900 mark, which is a kind of a non event we all have to admit. The remarkable information is when you notice, BDI in 2015 highest peak was at 941 points on sept 22nd. To find out this level, we need to go back one year ago, on 24th sept 2015 BDI was at 943pts.The road of recovery from February 9th, when the BDI was at his lowest, ie 290 on 9th feb 2016, is a long and slow process. According to various reports we can read (inviting you again to read the Bimco report dated 6th October 2016), « it’s quite unlikely the sector will return to profitability before 2019 ». But Which index level is supposed to be showing profitability ?

HS3 and HS4 index are showing a kind of revival, which might lead to bit of pressure in the days to come for charterers which will have to load in October. Also charterers have to bare in mind bunkers prices are on the upward, only this can lead next shipment to be done 5/7% above the last done. Converted into usdpmt, on a handy, it can quickly be an equivalent of 30/35kusd more than expected. We understood a handy ex Germany to Algeria was booked yesterday at 1.50usdpmt above the previous one fixed last Friday. Is it only the bunker effect ?

On the grains side :

  • Make your own opinion here

Mine ? after the bombs the bread.

On Iron Ore (all below source Fairplay.ihs)

  • « Chinese iron ore imports have outperformed expectations and the imports in September came in at 93 million tonnes, 8% more than the same month last year
  • Year to date imports indicate imports of 1,017 million tonnes for the full year 2016, an increase from 953 million tonnes last year.»

On Coal

  • « Coal imports to China are likely to reach 240 million tonnes this year compared to 204 million tonnes recorded in 2015.»

On the Capes

  • « overtonnaged market us unlikely to receive much help from demolition sales as the current spot freight rates are above the cash break-even level of 15-20-year old Capesize vessels.
  • In addition, scrapping activity is higher in the first half of each year – in 2015, 68 Capesize vessels were sold for scrap in the first six months of the year and only 25 in the following six months, said Eirik Haavaldsen, shipping analyst at Pareto in Oslo on Tuesday.»

What about global dry fleet ?

  • « In 2016, the global dry bulk carrier fleet has grown by 1.7% year to date and the figure should reach 2.0% for the full year.
  • pace of growth would fall to an estimated 1.1% in 2017
  • Raise to 1.8% in 2018 »

Don’t forget, to have a burger today, it’s international burger day… (yes it is)

Enjoy your diner



highest industry standard

No matter whether you’re a big one or just a small player. Samsung was surely not expecting this possibility to be up and running, and so Rio Tinto!

Rio Tinto is moving hundreds of million of tons of cargoes through the sea every year. Is it because they are a major player in this industry they have to face event like this one reported here

« A bulk carrier under charter to a Rio Tinto subsidiary has been arrested in Australia after inspectors found close to no food onboard and that crew had not been paid in months. » ?  full story available here

Or, despite the whole screening process which must be in place to evaluate the seriousness of the owners counter part, not much can be done , on charterers side to avoid such situation ?

According to Splash 24/7 it’s the second time this year, Rio Tinto has to face such situation.

Really does it means nothing can be done to avoid this ?

I would be tempted to say, well, yes this kind of situation can be avoided, just by paying a bit up the freight proposed and instead of going to an Owners who’s giving away his ships against monkey money, go with an owners being bit more expensive, bit more expensive because they do care about the crew, the ship, the environmental performance and all the rest going around the ship.

A quick look at Rio Tinto’s website, in their shipping section states :

« Fleet & Operations has primary responsibility for the acquisition, construction and commercial operation of the owned and chartered fleet. »


«  the goals are also for the ships and crews to achieve the highest industry standards in operational safety, crew health and welfare and environmental performance. »

Well done guys! On Mv ‘maratha Paramount’ it seems you got it to the point.

Still according to Splash 24/7 the ship involved is mv ‘Maratha Paramount’, said open in our system in Newcastle, in Australia. Interesting to see then as of today 6.00pm French time, on equasis, the ship records remains good with no Detention and last inspection, done in Aqaba on aug 3rd was mentionning 3 minor deficiencies, namely:

  • Garbage record book : not as required
  • Cleanliness of engine room : dirty
  • Electrical : broken

Let’s see when and if Equasis will update their records on this specific ship. Unless the information from Splash 24/7 is not relevant, but you can find here posted on youtube couple of days ago… Maratha paramount arrested

So it means, equasis need more than 2 days to update their records…

Anyway if this can happens to Rio Tinto, it also means, this can happen to any charterers on any size, on any route and view how the shipping market is performing today, it’s not the first time and won’t be the last.

What else ? as today I decided not to talk too much about grains, you can find some info found here and there on the mining companies

mining business

On the chartering side, index are doing the yoyo. BDI’s today back to 906 and only Panamaxes are managing to go up a bit and if you want more precise info to get into your next tender, you know where and you can get in touch with me…


trying to find opportunity

Today’s weighted time charter Average on the Handies is still on decline at 5915usd daily,

  • No route above 6’600usd
  • The spread between the best one (HS6 @ 6’539) and the worse one ( HS3 @ 5’164) is only showing 1’375usd daily difference.
  • The only route up is the HS4 (usg to skw pass, up by 32pts, remaining in the 6000+ daily)

Again and as said in a previous report, the concept of « repositionning business » or to take the words of the bigger sisters « Front/back haul » is for time being not in the air anymore. Handy owners are left with pretty much no other choice than keep trying to fix something making some kind of sense on the money and hoping the destination where they’re going to end up becoming by some magic the right place to be.

As mentionned by BMTI, on the Baltic/Continent market is getting filled up by ships quicker than cargoes coming out. No change, I keep believing we are in a market where charterers who can afford to remain behind their low ideas, ending up to find a taker. For charterers, timing is a key, patience a  paying off virtue. Black Sea keeps attracting owners ballasting from Gibraltar or West Med, but according to what we see/hear the momentum is cooling down right now. Difficult to say if it’s going to be a real trend or just a quick pause, before starting again. Today’s BDI, reporting mv ‘KBS Star’ 07 30’548 dwt dely Nemrut Bay prompt trip via Black Sea redel Algeria $8,000 daily. On the basis of a 30’000 5pct wheat stem ex nikatera with 7000x in to Algiers with 2500x out, this is giving voyage equivalent at something touch below 20usdpmt. (When last week, we were estimating the voyage equivalent above 20usdpmt). This about 1-2.00 usd takes also into account the bunkers upward movement.

ECSA, BMTI is summarizing quite well the challenge owners have to face « owners needs to be prepared to accept a waiting time to make the desired laydays »… For sure on one hand, owners are for instance all hoping for a ECSA market blip, hence postponing up to the last moment to commit themselves on the cargoes, on the other side, waiting and hoping for better days, as an impact on the 7days notices usually applying outthere.

Talking a bit about containers, about 6% of the fleet is under hot or cold lay-up. And yes containers are drybulk ships competitors. 3 to 8% of the Us grains exports are done through the boxes, freight being today the key decision factor for charterers. This means a challenging Marketing positionning for drybulk owners…

Let’s look at couple opportunities and probable close future market changes…

  • Port of New Orleans seems to be in the starting blocks to trade again with Cuba. New Cuborleans
  • Norway is the first country proposing his autonomous ships test site

Have a nice end of the day