Dry Bulk Vessel Owners Eye Operator Pools for Relief

Some critics say the market is too fractured for pools to do any good.

Panamax and Supramax owners are placing their vessels under the control of shipping pool operators in order to stem losses resulting from a dramatic fall in dry bulk rates on the back of depressed commodities markets and the Chinese economic slowdown, says Platts.

Torvald Klaveness has reportedly added between six and eight vessels to its Bulkhandling Pool (which trades Handymax, Supramax, and Ultramax vessels) in recent months.

The website for Navig8 states that four Supramax, three Ultramax, and a Panamax vessel have been added to its Supra8, Ultra8 and Pan8 pools since last November, for a total of 20, 14, and 15 vessels respectively.

Meanwhile, up to ten ships have entered TBS Ocean Logistics' Supramax pool in the last two months, causing a source at TBS to state; "There has been quite an uptick in interest [from shipowners in joining] our pools over the second half of 2015 in particular."

An unnamed ship operator told Platts that placing vessels into pools can help shipowners' returns and pointed out that a Panamax vessel on a 45 day ballast from Asia to East Coast South America to load grain would cost the shipowner up to $600,000, after ballasting and including port disbursement costs: "You would spend upwards of $500,000 before seeing any money."

However, by joining a pool in the Asia Pacific, "you start earning from the day of joining," the ship operator said, adding that standard alternatives such as idling and warm lay ups aren't viable options because they still cost money and might not be approved by the banks.

But another source questioned the effectiveness of pools, arguing that although the tanker market pool consolidation is about 5-6 percent, the dry bulk market is so fragmented that "a massive pool of 55-60 ships will still not [provide] even 1 percent consolidation," and that with fewer vessels in the pools, owners also have less negotiating power.

Still, pools are regarded as effective in many venues, including the liquefied natural gas sector: last fall, Dynagas Ltd., GasLog Ltd., and Golar LNG Ltd. agreed to form a carrier pool to jointly market their vessels, in order to take advantage of a growing LNG spot trading market.