Asian Dry Bulk Owners to Carry Containers Onboard As Containership Demands Skyrocket
Amidst the worsening crisis of container shortage in the industry, Asian dry bulk owners have taken a lead in turning it into an opportunity. Soaring profits have attracted dry bulk carriers in Asia to accept and transport containers onboard, setting new trends.
Singapore-based Swire Bulk is among the few initial bulk owners to adapt to trends, with increasingly moving containers through its dedicated fleet of bulk carriers. Several prominent dry bulk owners that have followed the suit include Pacific Basin and Taiwanese Franbo lines among others.
Many hints towards the exorbitant freight rates due to the tight availability spaces on container ships as major reasons for this shift. The transportation of containers from Asia to the United States and Europe has become extremely profitable owing to such rates.
The rates are so high that despite the Baltic dry index being at an 11-year high, carrying containers is more profitable than transporting dry cargo. According to Lin Cheng, vice general manager of Franbo lines, the gross profit margins have increased from 30% to 45%, in his opinion.
Franco Lines, with expectations of higher profits on similar grounds, has also decided to dedicate 5 out of its 18, 17000 dwt dry bulk vessels for carrying up to 212 TEU, containers each, on its decks without any extra modifications.
But carrying containers onboard bulk carriers come with few obvious reservations about securing mechanisms, and compliance with updated stability standards, and sufficiency of fire safety mechanisms. Therefore many P&I clubs along with classification societies like Bureau Veritas have issued guidelines on necessary modifications and retrofitting required for owners to abide by stowage rules.
In a recent historic first, Star bulk of Greece became the first Cape owners to receive class approvals to carry 1400 TEU's on its 175,000 dwt ship containers with modifications. At the same time, many European owners like the Golden Ocean have also been considering transporting containers on bulk carriers but are still researching its viability and readability.
Even though the trend is increasingly gaining popularity amongst the owners, many in the industry agree with Drewry's senior manager, Simon Heaney. He believes dry bulk carriers are temporary interlopers, who can not provide definite relief with small carrying capacities, and will soon abandon these plans when prices are back to usual.