The term ‘dry bulk cargo’ can be used to describe a number of different raw materials, yet all share some key characteristics. A dry bulk cargo is usually:
- A solid material (either a combination of particles, granules or large pieces)
- Shipped in large quantities
- Measured in deadweight tonnage (dwt)
- Loaded and shipped unpackaged, in lose form
- An unprocessed commodity which will later be used for the manufacturing or production of goods
What is dry bulk shipping?
Dry bulk shipping refers to the transportation of dry bulk cargo on ships known as bulk carriers. There are several different types of these specialist vessels, each capable of carrying varying amounts of cargo. For example, a small mini-bulker has a capacity of up to 10,000 dwt whereas a giant-bulker can carry up to 400,000 dwt.
The dry bulk shipping industry plays a central role in global trade. Without it, modern industry as we know it would not exist. Even everyday tasks, such as cooking a pizza in the oven, would not be possible without dry bulk shipping which is responsible for transporting the:
- Grain needed to make the pizza base
- Iron ore and aluminium used to make the oven’s metal components
- Coal-generated electricity used to power the oven
What are the major dry bulk trades in shipping?
Dry bulk cargo is split into two main groups: major bulks and minor bulks. There are three major dry bulk trades:
- Iron ore
- Coal (coking coal and thermal coal)
Combined, these account for around 67% of the world’s total dry bulk commodity trading. The remaining 33% is referred to as minor dry bulk trades, such as:
- Scrap metal
Let’s look at some of these dry bulk trades in more detail.
Iron ore is the raw material used to make iron. Found in the earth’s crust, there are, in fact, a number of different iron ores, including:
Iron ore is refined (this involves removing the oxygen from it) and turned into iron, which is then used in many industries across the globe.
Coal is typically mined using large machines, in one of two ways:
- Surface mining
- Underground mining
After extracting the coal from the ground, it is sent to a plant for cleaning and processing. Considered a fossil fuel, coal is mainly used to generate electric power, however it does have a number of other uses. For example, it can be used to produce cement, medicines, tars and heating. Furthermore, a specific type of coal (metallurgical coal) can also be used for making steel.
Grain (also known as cereals) is the name given to a group of commodities that includes wheat, oats, rice, and corn, which all come from harvesting the seeds of grasses. While cereals are produced in a number of countries, China is the biggest producer and is responsible for a quarter of the global grain output. Internationally, grains are the most important staple food, which explains why this dry bulk cargo is in such high demand. However, this high demand is not without its risks as grain is considered one of the most difficult and dangerous dry bulk cargoes to transport.
Sand and gravel
Typically, sand is mined through an open pit but it can also be extracted from beaches and inland dunes, or dredged from sea beds and riverbeds. It is a valuable dry bulk commodity as it has a number of commercial uses, including:
Sand and gravel are used to make materials used in construction projects worldwide, such as concrete, bricks and pipes
- Making glass
Sand contains silica which is a valuable commodity used to make other products, including glass
- Building roads and keeping them safe
When mixed with asphalt, sand can be used for highway construction. Plus, it can be used on icy/snowy roads to make driving safer during winter.
Scrap metal refers to metal which is left over from a manufacturing process, or has been discarded by consumers, but which can be recycled and has monetary value. It may include large items like machinery parts and building supplies, as well as smaller items such as tin cans and metal drillings. There are two main types of scrap metal:
Metals that contain iron, such as steel and cast iron
Metals that do not contain iron, such as copper, brass, aluminium, zinc, magnesium, tin, nickel, and lead
The transportation of scrap metal involves a number of potential hazards, such as:
- Fire risk
- Loading damage
- Wet damage
- Health concerns and physical injury
Bauxite is one of the most abundant minerals on the planet. It can be found in many countries, with large deposits in West Africa, Australia, South America and India, as well as smaller deposits in the Caribbean and Southern Europe. Brownish-yellow in colour, it is generally found close to the earth’s surface with layers varying from under 1 metre to over 40 metres. After being mined, bauxite is used to make alumina (aluminum oxide) which, in turn, is used to create aluminium metal. Bauxite can also be used for the manufacture of other industrial products including abrasives, cement and chemicals.
How to charter a dry cargo vessel
With more than 80% of international trade being transported by sea, maritime transport is hugely important for moving all kinds of goods to where they need to be. And dry bulk cargo is no exception. In order to transport dry bulk commodities (such as coal, grain and sand) it is necessary to charter a ship, however, the type of dry bulk vessel used for a specific shipment will depend on the following factors:
- What is the size of the cargo?
Very Large Ore Carriers (VLOC), Capesize and Panamax vessels have large capacities so are suitable for bigger cargoes, whereas Handymax and small handy vessels are more suited to carrying smaller cargoes.
- Is it hazardous cargo?
If you’re shipping dangerous goods, it is vital you take appropriate precautions to ensure their safe storage and transportation.
- Is it food-grade cargo?
Regulations require food-grade cargo to be transported in a special container that has not previously been used for storing harmful substances or chemicals.
- Is it valuable cargo?
For high-value items it is important the necessary steps are taken to handle goods with a high level of care and security.
Given the complexity of dry bulk shipping, it is recommended to use a specialist broker, such as Clarksons. Our experienced Dry Cargo team operate from 14 offices in six continents, enabling us to offer global coverage. With 170+ dry cargo brokers, we cover all commodities, of all sizes, across all trade routes – all backed by 24/7 support for our clients. Our long-standing relationships within the sector are founded on local knowledge and mutual respect, allowing Clarksons to act as a vital link between charterers and shipowners who need to transport the dry bulk cargoes required by a growing global population.