There is a big question regarding dry bulk shipping that you have to answer before buying a suitable vessel: Do you want to get involved in short sea or deep sea dry bulk shipping?
Dry bulk shipping is the main provider of transportation services around the world when it comes to commodities. These are divided into major bulk cargoes and minor cargoes, with major bulk cargoes including coal, grains, etc, and minor bulk cargoes including fertilizer, cement, etc.
Dry bulk vessels have different capacities, and this is how they are categorized. From mini bulkers to capesize bulkers, there are many vessels to consider.
When it comes to dry bulk trades, some are short sea, meaning local, and others are deep sea, meaning international. Here is a guide to both of these.
Short Sea Shipping
Short sea shipping is also called coastal shipping, and it involves the transportation of commodities short distances, often along the coast. These vessels do not cross the ocean, and as a result they consist of smaller vessels like mini bulkers. Short sea shipping takes place in certain areas such as between the Baltic states, between the UK and Ireland, around Black Sea countries or around the Mediterranean.
The size of the vessels is just one difference. In addition, the vessels often have modifications that are made according to their trades. This makes them more flexible for particular types of cargo. The short sea trade is more specialized, and it is typically harder to get into because it is based on strong and established relationships between parties. There are other issues to take into consideration, such as the seasonal effects of trade. For example, if you transport grain, this will be highly seasonal. But the smaller vessels are very flexible, allowing them to take many types of dry bulk cargoes.
One advantage is that it is not as volatile as international shipping. With international shipping, this is more affected by supply and demand around the world, whereas short sea shipping is less affected by this.
Deep Sea Shipping
Deep sea shipping involves the transportation of dry bulk across longer distances, usually across oceans and between continents. As a result, it involves the use of much larger vessels. Deep sea shipping is very competitive and there are far fewer barriers to entry, compared to the short sea trade. However, the market is highly related to supply and demand, and it can be quite volatile as a result.
As the demand for shipping increases or decreases depending on factors like economic growth of particular countries, this affects the trade. Also, large vessels are not as flexible with their cargo intakes, and this is an important issue to consider. Seasonality does come into it, especially when transporting grain products around the world. However, typically it is not as important an issue as it is with short sea shipping. Some vessels are suitable for both types of shipping.
While most vessels are designed for either short sea or deep sea shipping, some can do both. These types of vessel are much more flexible, and they can be used for both shorter coastal trades and longer routes.
No matter what type of dry bulk shipping you want to do, you will need the best ship for your needs. These days, the best place to start your search is online. Sites like Nauti SNP make the process of buying bulk carriers easy, making them a great starting point when you are considering making a purchase.
What Is the State of the Market?
The dry bulk market has not been great recently, mainly due to the increased supply, low demand, and bad economic indicators around the world. The imbalance between the growth of fleet and growth of seaborne trade has mean there is a greater increase in fleet capacity than trade, and this has affected demand.
The problem of too much supply became a bigger problem for the freight market in 2016, and it is thought that vessels need to exit the market to get more equilibrium. Short sea shipping has also been affected by differences in the economic growth of particular countries in which they operate.
Dry Bulk Shipping: Consider Your Options
This guide covers the main differences between short sea and deep sea freight moving, and you can use this to help determine which type of dry bulk shipping is most suitable for you. Take into account the benefits of each option, and also look at the state of the market for both types of shipping in your location and internationally. After that, all that remains is finding the right ship for your purposes.
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Photo Rex Wyler, supplied by Fathom Events
Source: The Global Dispatch
