Brighter outlook for dry bulk shipping
Some time ago Cesare d’Amico was convinced that it was just a question of time for business to reboot itself: “We just have to grit our teeth for another six, maybe eight, months.” In fact, the downturn in the dry bulk cargo segment was protracted, it went on for years, but now business has picked up.” We had already experienced a strong spike, perhaps excessively so, in fact it was a momentary rebound, but this current recovery is appreciably stable,” explained the CEO of the Italian shipping group that boast a fleet of 100 ships dedicated to dry bulk cargo. Q1 and Q2 have confirmed the growth trend, “and we’re expecting the positive trend to last from 2018 to 2020 at least; world demand will also sustain the ships we’re getting over the next few months.” Talk about good timing: in mid-2018 d’Amico will take delivery of two new 87-thousand-tonnes eco-ships from Japan’s Oshima shipyards. The recent downturn had deep seated causes: many shipowners have had to throw in the towel, and many ships – and not just the oldest – have been dismantled: there was excessive global hold capacity, which aggravated the situation. “But what’s driving the sector currently is, primarily, the economic recovery: globally we’re seeing a 3-3.5% upturn, it’s a significant increase.”
GUARDA IL GRAFICO
Now that “the hellish period”, as he calls it, has been left behind, the sector has been somewhat cleansed, even though the dry bulk market still remains a “fragmented” segment. But who has remained standing? “Those that offer quality: both in terms of ships and services,” says Emanuele d’Amico, son of Cesare, and general manager of dry cargo. “Which shipper would you choose if faced with a shipowner with older ships, with less capacity, with heavy environmental impact and higher fuel consumption, and a shipowner group with vessels fresh from the shipyard, with more hold capacity and greener credentials in terms of emissions and consumption?” Many large dry bulk traders have already decided.
D’Amico has secured several profitable contracts worldwide in several segments: cement delivery from Quebec headed for the New York area. The agreement signed with giant McInnis Cement (from February 2018 to December 2021) involves the transport of 800 thousand tonnes per year. With the agreements already signed with Greece and Turkey, cement shipments for d’Amico shipping will be a yearly one-and-a-half million tonne deal. The Italian shipping group has also been buoyed by the recovery in dry cargo in Southeast Asia too: it signed several coal transport contracts totalling 5 million tonnes per year. The largest deal was the one reached with GN Power, a power-generation company in the Philippines, to supply a new coal-fired power plant. Coal will be loaded on d’Amico ships in Indonesia, as part of a ten-year deal for 2 million tonnes per year, until December 2029.
The d’Amico group has fine-tuned its strategy by focusing on the right mix between the spot charter and long-term lease markets. Its large fleet can support it. The Italian case The starting point, according to Cesare d’Amico, is that “large traders like the Ferruzzi are gone.” Large entrepreneurial empires, able to import huge quantities of coal, grain and other bulk goods, have disappeared. “However, it would be untrue to say that dry bulk transport is no longer carried out in Italy: the Enel and Ilva plants are continuing to operate, there is an upturn in grain trade. Also trade in pellets and wood pulp has shown good volumes.” Sure, especially for wood pulp, “The competition from containers is being felt,” explained Emanuele. “It just confirms the fact that Italy has become a logistics platform geared primarily towards containerized cargo.”
Source: The Medi Telegraph