Size do not matter ((anymore) in shipping)

Size has never been the key thing generally speaking. Unless you’re a boxer champion in which case it’s easier to be tall and light for example, unless you need to park your SUV in your 1970’s designed Parisian underfloor parking, unless you’re a fisherman competitor, unless (please fill in here with your own “unless”)… .

But in shipping, it’s been slightly different and that’s probably why market has been divided in 6 different categories in the dry at least, namely: Coaster / Handy / Supra/Panamax/Capers with some sub size like Ultras which came in lately.

Nowadays with panamaxes being has handy as supramaxes, Charterers are always finding solutions to keep freights relatively low. They have much more flexibility than Owners and when a size is facing a squeeze of tonnage available, they split the cargo into 2 smaller shipments and of course don’t pay attention to Owners complaints stating the « economy of scale » does not work on the little ship and « charterers shall pay more to enjoy a fixture with the little lady »… but this does not work for owners, as charterers being flexible and smart (most of them are), the key decision driver is the money, and no matter if they have to have more cp’s signed to cover the requirements. Alternatively, charterers don’t really mind if the ship is a quarter full of air due to vsl’s cut size…and booking a supra for a handy requirement.

As a matter of fact, more and more we are seeing cargo requirements being quoted asf « Handymax up to Ultramax », meaning, it’s a nightmare for the brokers to quote on the market (but this is a detail) it also often means charterers have more cargo than a single ultramax can load (which is a good thing for the brokers, but it’s another detail) and the main purpose of this for charterers is to evaluate the pmt cost of transportation and take the cheapest one. (Big responsible charterers will say « the most eco friendly combo », but this actually remains to be seen).

And surely Owners are feeding charterers game by putting at sea ships being year after year able to load more and more cargo with ships being more and more « handy »… by handy I mean fitting into ports restrictions with short loa, reasonable WLTOHC, narrow beam, shallow draft… all of this to the benefit of… charterers.

What’s going on, on the chartering market ? With the above statements, I’m not sure it would be clever to propose you a size by size segment analysis. So I let you, big boys, go and check BDI today’s results to make up your own opinion.

On the grains, if you were in the belief that Uk is a country where it’s always rainning, please read this one and get rid of this « lieu commun »…“I don’t see rain” (quote from a brit expert)

Related to above (ie climate) and being responsible, Cargill’s CEO is gently inviting President Trump to stay in the Paris Climate agreement :  Take it Cargill chartering team are also paying attention to ships consumption when looking for a « handy up to pmx ».

That’s it for today

Rgds

Jerome

 

 

 

 

 

 

 

 

 

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