Dry Bulk Shipping Report 2015-16

at for the powering of cargo ships,

as a replacement for Heavy Fuel Oil.

Such developments will require new

propulsion systems, with the aim of

creating a cleaner, more sustainable

industry.

Another emission related development

is the Ballast Water Management

Convention 2004 (BWMC), which is

expected to come into force shortly.

The Convention looks to implement

methods to reduce the harmful effects

of ballast water discharge, which is the

estimated 0.66 billion tonnes of ballast

sea water, taken on in one part of the

world (to balance the vessel after cargo

has been unloaded) and expelled in the

coastal waters at the next port of call,

where more cargo is loaded.

Ballast water discharge typically

contains a variety of biological

materials, including plants, animals,

viruses, and bacteria. These materials

often include non-native, exotic species

that can cause extensive ecological

and economic damage to aquatic

ecosystems, along with serious human

health issues.

Not only will the cost of compliance to

shipowners be very high, with a ballast

water treatment system costing from

$500,000 to $5 million, but the use by

the US of a different set of standards to

the International Maritime Organisation

which adopted the BWMC, along with

almost a third of the tonnage of world

shipping, is causing confusion and

potential added expense for operators

FUEL EFFICIENCY

With bunkering such a significant

proportion of the operating costs across

the Dry Bulk fleet, any developments

in fuel efficiency are heartily welcomed

by ship owners and charterers, as are

the higher rates which can be achieved

by modern vessels with superior

environmental credentials, relative to

older units.

Drewry, independent maritime advisor

and researcher notes the trend, “New

generation vessels with fuel-efficient

designs are an emerging feature of the

market. What has yet to become fully

clear is how many of the advantages

claimed are real as opposed to

shipbuilders’ hype. Improved engines

and propulsion systems are a factor.

There are, doubtless, other design and

technological innovations. However,

choices over hull coatings and anti-

foulings also have an impact on fuel

efficiency.”

Scorpio Bulkers states that recent ship

orders have been “focused on new,

more fuel efficient ship designs, where

shipyard descriptions offer significantly

lower fuel consumption compared with

existing vessels through a combination

of new technology main engines and

refinements of hull forms”

TECHNOLOGY

High level analytics, which allow for

better and faster interpretation of

ever increasing amounts of data, to

accommodate the improved operation

of vessels, are much in demand, with

continual development sought after for

optimal performance; ”The industry

requires advanced algorithms, huge

data, innovative analytics and cutting-

edge technology, while always being

firmly grounded in commercial reality

and application.“

In an industry in which the asset is

often located almost anywhere in the

world, other than where the owners

and operators are, remote monitoring

systems are crucial and becoming

increasingly sophisticated, with web-

based fleet management systems

providing a desk, tablet or mobile-

based voyage management solution

for owners and charterers. The precise

real-time location of ships in or near

dangerous waters can be tracked

via satellite

. This, and advanced

communications systems, will have the

added benefit of allowing port slots

to be booked and enabling the ship to

arrive just in time, with no waiting, no

wasting of fuel and subsequently no

effect on the efficient utilisation of the

vessel.

Research into new materials, beyond

steel is also taking place, with the

potential to produce stronger and

lighter vessels, thereby increasing fuel

efficiencies. Ideas mooted for such

new materials are the option of self-

healing skin and embedded sensors

which report real time information

back to the bridge and owners,

allowing clear information regarding

the ship’s condition and precisely

tailored maintenance. All of this makes

increasing the lifecycle of vessels by

decades, a possibility.

Recent progress in software engineering

and advanced computing has also

allowed for the creation of advanced

virtual environments, in which ships

can be built and tested under diverse

conditions. This next generation

emulation will provide the opportunity

to adjust and correct the design, well

before any actual work is ordered at the

yard, optimising the design process.

CONSOLIDATION

In February 2015, five of the world’s

biggest dry bulk carriers launched

a common chartering platform for

their biggest vessels in an attempt to

overcome some of the issues caused

by the fragmented nature of Dry

Bulk shipping ownership. Capesize

Chartering — consisting of Antwerp-

based Bocimar International NV;

Monaco’s C Transport Maritime;

Bermuda’s Golden Ocean Group Ltd.;

and Golden Union Shipping Co. and Star

Bulk Carriers Corp., both of Athens —

will combine and coordinate chartering

services for a combined 80 capesize

ships.

This move reflects the difficult times in

which the Dry Bulk shipping sector finds

itself, with a senior executive of one of

the companies involved saying, “Sharing

ports and ships is essential to cut costs

and have some kind of a collective

bargaining power with cargo owners

although pricing will still compete in

freight rates. I expect more companies

to join Capesize Chartering going

forward, or other such joint ventures

being formed.”

“New generation vessels with fuel-efficient designs are an emerging feature of the market”

Drewry