Willem Vermaat, shipping director at Heidelberg Materials Trading, shares his perspective on the state of dry bulk.
Shipping is a small world. How often do we hear this when walking around at a shipping conference and running into old acquaintances? As the years go by, the collection of business cards keeps on growing. At the same time, we can walk into an anonymous office in an indistinctive building with a simple name plate on the door and discover yet another independent, well-functioning and profitable shipowner running a fleet of few vessels.
We often see owners and technical managers pushing the narrative of economies of scale to operate vessels efficiently, safely and compliantly. However, since we see 2,179 individual shipowners owning less than five bulk carriers over 10,000 dwt (as per Clarksons research), we must conclude there is room for smaller owners handling all aspects of their business in-house.
Very often these smaller companies are run by seasoned shipping experts, boasting decades of experience and having faced multiple market cycles. Yet they do not search for the limelight or boosting their ego in the media. Instead, they focus on running a reliable operation, with high integrity and providing stable jobs for a significant number of people.
We see similar trends in operating companies. Whilst we have seen some consolidation recently, creating larger shipowner/operator companies, we also see more than 20 independent operators based in Copenhagen alone. Worldwide, the numbers are significant. Where some companies will be operating only a handful of voyages from small offices, others will have a worldwide setup with offices in key places.
For charterers, this is generally a good situation. It creates an environment which allows for competition between all players. It minimises the risk of monopolistic development amongst the tonnage providers and ensures freight rates are the result of the prevailing market conditions.
However, if we look at environmental and compliance related matters, there is a genuine challenge. To ensure a sustainable future in shipping, a consensus needs to be reached on many areas. Considering the large fragmentation in shipowners, based in all corners of the world, either from polished headquarters or anonymous tiny offices, reaching unified and fully supported solutions still seems far away.
