THE OPERATION OF DRY BULK SHIPPING: PRESENT AND PROSPECTIVE TRADING COSTS IN THE CONTEXT OF CURRENT AND FUTURE MARKET TRENDS

During the past two years operators of dry bulk shipping have fared little better than tanker operators. This has been reflected, not only in rate levels, but also in the low prices that modern bulk tonnage has been fetching on the sale and purchase market and in the poor trading results shown in many shipping companies' annual reports. As in all other sectors of the shipping market the dry bulk carrier operator has been squeezed by rising costs. These have been brought about by inflationary pressure on operating and bunker fuel costs, very low freight revenues caused by the continuing world economic recession (particularly in the iron and steel industry) and a surplus of dry bulk carrier tonnage. Section 1 of the study reviews the dry bulk trades, estimates the current dry cargo surplus and indicates the probable growth of trade up to 1984. In Section 2 the report comprehensively analyses the costs of operating dry bulk shipping in the period 1972-78 for four vessel types-15,000 DWT'tweendecker, 25,000 DWT geared bulk carrier, 60,000 DWT "Panamax" and a large bulk carrier of 110,000 DWT. Capital, operating and voyage costs are examined to indicate both the changing structure and the rapid escalation in costs. The study then goes on to analyse revenues during the same period for the three smaller vessels in both the spot and timecharter markets. In the spot market costs and revenues for both 1974 and 1977 are examined to show the very large profits and losses which operators incurred during these two years. The study concludes by forecasting when the market may return to equilibrium, indicating the level of costs which will be incurred and the revenues required by owners for newly contracted unsubsidised tonnage to become viable.

  • Corporate Authors:

    HPD Shipping Publications

    34 Brook Street, Mayfair
    London W1Y 2LL,   England 
  • Publication Date: 1979-1

Media Info

  • Pagination: n.p.

Subject/Index Terms

Filing Info

  • Accession Number: 00194552
  • Record Type: Publication
  • Source Agency: HPD Shipping Publications
  • Report/Paper Numbers: Study No. 71
  • Files: TRIS
  • Created Date: Jun 13 1979 12:00AM