Subject for today is again shipping subs

Crazy market, long time we have not dared to define the market with this word. BMTI today’s do not hesitate and define the continental market with such « crazy » word. With 35/40’000dwt owners offering beyond $10’000 for a trip from Continent to ECSA. Another fixture reported today at $ 10’000 daily with delivery Morocco via baltic with redelivery West Africa is somehow showing and summarizing the situation.

Checking numbers of Handies available in the Gib Baltic area we were counting something like around 60 ships open spot up to mid december with something like more than 15 fresh positions.

In the meantime Owners resistance is clearly seen on the basis of owners not hesitating to ballast from South to Baltic, being unemployed and taking their time to propose (impose) their rates to charterers’ stems. Going through the Freight world report attached, as every Thursday a summary on the S&P activity :

  • 560 bulk carriers changed their ownership
  • For a total of Us $ 4.3 Billion
  • On average… then US $ 7.6Million is the price /unit.
  • Few examples in the S&P Report

o   RHL Catalina 53kdwat blt 2002 sold « bank driven sale » @ US$4.8m

o   4*38’800dwt built 2016 chines built sold en bloc @ US$ 62.0m

Finally probably the first Ultramax ever built (if such can be called an Umax) mv ‘el Hadjar’ 64.5kdwt built 1981 was sold for demolition (wich was probably to the Ultramax family what’s your nokia PT 612 was to the smart phone community… ie handy but kind off obsolete). Willing to know more about the NOKIA PT 612 performance? read that:

  • Networks AMPS800 (what’s that? I don’t know)
  • Dimensions (mm) 180 x 55 x 40 (very handy indeed)
  • Weight (g) 500 (= about the weight of an apple pie)
  • Stand by (hour) 14 (you’re impressed right)
  • Talk time (min) 75 (hu… not enough time to negotiate a ship)
  • Display mono (no colours? that fine, I’m color blind)
  • 40-number memory (yes 40 numbers, all your best friends in the box)
  • automatic redial (yes can do that, easy, so convenient)
  • speed dialing (abt 14knots wog)
  • call-forwarding indicator (is it the police number?)
  • 2 separate phone numbers (useful if you’re a spy or unloyal to your wife/husband)
  • power off & signal strength indicator (so you know what’s going on)

Back to serious stuff, last week I was mentionning the concept of « failing on subs » with the following words « Another comment which we can read on bmti today raised my attention « A high amount of failing has been reported in recent business as charters see fit to apply discounts to previously agreed business ». Really ?! failing on subs can happen once fixed, basis all terms being accepted (money being too high for charterers) and charterers having all their subs in hands but not willing to proceed further as a cheaper ship showed up in between. Then some charterers would not hesitate to drop a ship when another one coming in with few cents less ? How come ! I have been told since I started this business, this can not happen. Maybe time have changed ! Maybe… It could also be a strategy from charterers when time is getting less in their favor to ‘fail on subs’ just to try to change owners minds and make them losing their confidence and patience. It’s tricky ! and somehow yes very frustrating for all parties involved (putting aside the charterers of course).»

this lead to some exchanges with an Owners, who made this comment about the subs and the concept of failing on subs, which please find below


subs is just a misfunctioning of the shipping markets. chrtrs MUST check a vsl workability before even finalizing main terms (not to say before even starting negos). the ‘subs system’ should simply be declined by owners. It is just a FREE OPTION (in the sense of cost-free) in the hands of chrtrs. But in economics, an option has a value which must be rewarded by a price. Unfo chrtrs don’t pay for such a price. Owners should do their outmost to gradually cancel this concept again. If market keeps picking up, this might happen.


On which I would just make couple of comments :

  • The sub concept has been in the industry for a while, it’s now a common practice, Owners challenging or even unwilling to work with subs might have some troubles nowadays to enter into  a firm nego.
  • « Charterers don’t pay the price for such » : in the meantime, why would they pay for it if they can have this option for free from another Owners’ competitor ? and in the

last years it was going on the other way round with owners keen to discount their conditions against a firm cargo with « almost no subs »

If you’re willing to know more about these subs, you can still have a look here subject about the subs

alternatively, another owners (who probably just failed on subs also today) suggesting the following curation about the subs concept:

“I propose that all brokers get together and impose a $2’000 fee for each fixture failed on subjects. This amount will be split 50/50 between owners and brokers, to cover for the loss of time incurred, and caused by the party failing the ship. This would prevent some speculative operators to fix and fail vessels back and forth.. The fee would be waived only for valid reasons, provenly beyond charterers reasonable control, such as force majeure or nominations rejected on grounds that were not possible to foresee at the time of fixing. I will sign your petition, “


as you know brokers are never against a way to make some money to cash in…we need to have a think about this proposal. call on my Nokia!

Have a nice day/evening


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