Dry Bulk Segment - Essay Example

Dry Bulk Segment:

A dry bulk segment is particularly activated to move unpackaged bulk cargo, such as coal, grains, ore, and cement. In Farstad Shipping, there is a single deck and top-side tanks in cargo places and they proposed to carry dry cargo in bulk.

Dry Bulk:

Dry bulk is a group of cargo stored in large volumes where items such as grain, cotton, coal, etc can be stored. Dry bulk shipping companies operate under high instability in lease rates and profitability. Coal, grains, and iron ore are the main commodities transported by Dry Bulk carriers. These goods are transported in large ships.

Dry Bulk Market:

“Dry Bulk Market had the largest fleet growth in 2011 amongst other shipping sectors” (The Outlook for the Dry Bulk … Italian Style, 2012).

There will be huge demand and supply for the dry bulk as long as the buyer ships the products and commodities from one place to the other. However, due to the increase in the price of the commodities, the present market position stands at a lower level. The main reasons are lower market expectations, lower demand for the cargo supply, critical conditions of the market life cycle, and declining fleet growth.

Table of Price and Market Development:

The company needs to control its existing strengths in shipping and attempt to expand its markets to the major areas such as South Asia and North America, to gain a wider area of operation. The dry bulk market may have higher rates in the future. A temporary rise in rates also seems possible during the year. While world trade is likely to increase at a reasonable rate in 2012 as well as 2013, the amount of new capacity will consume high rates towards operating expenses.
Typical Routes for the Dry Bulk Segment:

“Emerging markets such as India and China are likely to be key to the success of Farstad. As they are the growth markets for any new company, so further addition to the company’s top line would be dependent on its efforts to exploit the trade routes emanating from these countries” (Abhishek, n.d.).

Type of Vessels in the Dry Bulk Segment:

“Sizes of dry bulk vessels vary from very small carriers of less than 10,000 dwt to the largest Capesize dry bulk carriers with a capacity of more than 100,000 dwt” (Segments, 2012).

The following are the type of Vessels:

“Capesize, Panamax, Handymax and Handy size” (Segments, 2012). Capesize is used to transport iron ore and coal. Panamax can carry grain, coal, and bauxite. Small shipments such as sugar and other commodities are carried by Handymax and Handy size. Capesize is the largest vessel and Handy size is the smallest vessel out of the four vessels in the dry bulk segment.
10 Biggest Norwegian Dry Bulk Ship Companies:

Major companies include Western Bulk, Golden Ocean Group, Pareto, Nordic Bulk Carriers, Star Bulk GAC World, SAGA Forest carriers INTL and NYK Line.

Biggest International Dry Bulk Companies:

Companies like Horizon Lines, Kingcome Navigation, OT Africa Line, Finn Carriers, Bering Marine Corporation, etc are some of the major players in this field.

Future Prospects of the Dry Bulk Market:

Global dry bulk is poised to rise in the future and freight rates may become more stable and affordable. Thus, shipping markets will have better prospects in the future.