However, there are many other factors that affect the fortunes of the dry bulk sector and all those involved in handling dry bulk cargoes. To truly understand what is happening in these markets, it is important to dig below the headline global figures and look in detail at the patterns of trade for different commodities, the factors that are dictating inter-regional cargo movements, market forces in each country and even local port conditions.<\/p>\n
By taking a snapshot of some of the leading trends in recent weeks and months, we can gain an insight into how shipping agents can anticipate the needs of their customers. The good news is that there has been a steadily upward trend for dry bulk shipping markets in recent months. Within this context of recovery, we look at some examples of how the dry bulk industry has developed, where market trends may lead and the opportunities that this may create for ports and shipping agents.<\/p>\n
India\u2019s coal sector <\/strong><\/p>\n GAC India covers 60 of the country\u2019s ports and we have seen a marked increase in coal imports in recent years, particularly across India\u2019s east and west coast terminals. Although India has a wealth of indigenous coal supply and was the world\u2019s fourth largest coal producer in 2011, it does not yet have the capability to mine quantities large enough to meet its own domestic demand for thermal power. The demand-supply gap for coal in India during 2011-2012 was 114 mmt (million metric tonnes), and this is expected to rise to an estimated 200 mmt by 2017. As a result, it imports vast quantities of coal from South Africa, Indonesia and Australia. It is the country\u2019s power stations and steel-makers that are driving the increased import activity, as India continues down the path of large-scale infrastructural development and increasing use of electrical power, which is leading to increased demand for imported coal.<\/p>\n We have seen an increased use of larger Capesize vessels for the import of coal to India and a substantial shift towards importing cheaper and more cost-effective products, in terms of supply chain costs, from Indonesia, given the geographical advantage of being closer to India\u2019s shores.<\/p>\n However, there are many challenges in handling dry cargo in India. The lack of adequate mechanisation at many ports requires the manual handling of large cargoes, as well as the manual loading of rakes and trucks, which significantly reduces the efficiency of operations and requires the onward transportation of coal cargoes to off-site storage centres. Compounding this, the requirement for moving large quantities of imported coal to storage yards also places a strain on the road and rail systems. This can create bottlenecks, not only on the road and the rail tracks, but in the customer\u2019s supply chain. There is a need for better rolling stock, rail connectivity and dedicated rail freight corridors, better roads with improved load-bearing capacity and higher payload trucks. Currency markets are also having a significant bearing on the Indian coal market, with the recent slump in the value of the rupee against the dollar driving up the cost of India\u2019s coal imports.<\/p>\n Despite these challenges, the opportunities for the dry bulk handling sector in India are significant. There are signs that the required competition and investment are starting to flow, with a number of private companies developing additional coal terminals to meet the demand for larger, deeper berths and additional storage facilities. In the meantime, the challenge for GAC is to help customers to manage their supply chain requirements in India in order to create greater efficiencies in their dry bulk operations.<\/p>\n Australian iron ore <\/strong><\/p>\n GAC Australia too, is proving its agility in responding to the requirements of its coal customers and changing market demand. While demand for iron dipped during the recession, mining giants in Australia have forged ahead with new projects that will pay dividends.<\/p>\n One major mining company has recently completed its expansion project in Western Australia which, according to reports, is expected to add an addition 50 million tonnes in annual iron ore output capacity. While there may not be enough demand at the moment, with China being Australia\u2019s biggest customer, this has the potential to alter market dynamics in the years to come. While exports have slowed as China\u2019s economy has lost some momentum in recent months, the dry handling sector in Australia remains strong in the face of competition from coal and iron ore exporters in Brazil, South Africa, Indonesia and the USA, all of whom are increasingly targeting the Asian market, in part due to slower demand from Europe.<\/p>\n A key component of the shipping agent\u2019s work is to understand the relevant port and shipping regulations. These do not only differ between countries, but also from port to port in the same country. In Australia, these regulations can be subject to relatively frequent change. For example, the Port of Geelong has its own detailed protocol on the handling of dry bulk cargoes covering loading and unloading, dealing with wash-down residues and cleaning the facility, the vessel and local roads. Ensuring that all of the relevant authorities are engaged, paperwork filed correctly, communication with all parties is effective and measures are put in place to ensure compliance is time-consuming and complicated. Appointing experienced ship agents with in-depth local expertise and good-working relationships with the authorities reduces risks and saves time and money.<\/p>\n Intra-Asia trade <\/strong><\/p>\n From a regional perspective, intra-Asian trade is set to grow significantly in the next few years, particularly after 2015 when the ASEAN (Association of South East Asian Nations) free trade area comes into effect in full. Since the agreement was initially signed in 2010, the increase in trade between countries across South East Asia has grown markedly, despite the wider economic woes facing the shipping industry. The exchange of agricultural bulk commodities between ASEAN and China, of coal from Indonesia to The Philippines, or steel from Malaysia to Vietnam is big business. What is more, for operators in these regions, the potential for further growth is significant.<\/p>\n Greater co-operation on trade between ASEAN countries and China will see trade volumes double within the next decade. China\u2019s Premier Li Keqiang was recently quoted as saying that China would work with ASEAN to \u201cstrive to expand bilateral trade volume to USD1 trillion by 2020, and increase bilateral investment by USD150bn dollars during the next eight years.\u201d This is not insignificant growth. This will have a marked impact on the dry bulk trades across the region, which will \u2013 if predictions are correct \u2013 be swelled by increased infrastructural development within and between the ASEAN nations and key trading partners.<\/p>\n But there are still significant challenges to overcome in order to meet Premier Li Keqiang\u2019s 2020 goal. The port infrastructure in many parts of South East Asia is already feeling the strain of an increasing number of larger vessels being utilised on intra-Asia and shortsea trades. The berth, port equipment and onward logistics infrastructure in some emerging ports, for example across Myanmar, are not yet equipped to efficiently handle the amount of tonnage due to pass through. Congestion is a problem across many of the developing ports, including those of increasing strategic importance to the region. This must be addressed to facilitate growth and increase confidence amongst shippers of the efficiency of operations when making such port calls.<\/p>\n The opportunities in the ASEAN nations are many. GAC has a very strong presence across the region, operating across a wide range of sectors and industries and providing a full portfolio of shipping, logistics and marine services. For dry bulk handlers, having local expertise and experienced personnel on the ground are absolutely essential to operate in the region, where schedules are subject to frequent change.<\/p>\n The handling of dry cargo <\/strong><\/p>\n The handling of dry bulk cargoes is a highly fragmented and complex operation. Bulk vessels and their cargoes require agents with the knowledge, experience and resources to oversee shipments from loading through to discharge, that can provide a cost-effective solution tailored to the needs of every shipment and that have an in-depth understanding of dry cargo operations and a local presence worldwide.<\/p>\n Supply chains must also have the agility to accommodate fluctuations in trade routes, such as those outlined above. The right shipping agent can make a big difference, if they have the resources to respond to changing trade patterns and in-depth knowledge of their local markets that will enable them to respond proactively to anything that might threaten the safe, timely and efficient movement of their customers\u2019 cargoes.<\/p>\n GAC\u2019s unparalleled expertise in handling the full range of commodities is reflected by our specialist Dry Bulk Team which works with skilled representatives at loading and discharge ports to ensure that the needs of ship-owners, receivers, charterers and traders are met safely and efficiently. With our global coverage covering all major dry bulk locations, we are able to act as both load port and disport agent for the same voyage hence ensuring smooth, seamless operations from origin to destination.<\/p>\n","protected":false},"excerpt":{"rendered":" Global dry bulk markets are not immune to the pressures and challenges faced across the shipping industry, particularly as shipping continues to recover from the financial crisis and the global economic slowdown. Gurumurthi Shankar, GAC\u2019s Group Sales Director, takes a look at the recent trends in dry bulk trade in Asia and what this means for shipping agents<\/p>\n","protected":false},"author":8,"featured_media":2551,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[37],"tags":[],"sponsor":[],"class_list":["post-2550","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-products-services-greenport"],"acf":[],"_links":{"self":[{"href":"https:\/\/www.portstrategy.com\/greenport-congress\/wp-json\/wp\/v2\/posts\/2550","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.portstrategy.com\/greenport-congress\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.portstrategy.com\/greenport-congress\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.portstrategy.com\/greenport-congress\/wp-json\/wp\/v2\/users\/8"}],"replies":[{"embeddable":true,"href":"https:\/\/www.portstrategy.com\/greenport-congress\/wp-json\/wp\/v2\/comments?post=2550"}],"version-history":[{"count":1,"href":"https:\/\/www.portstrategy.com\/greenport-congress\/wp-json\/wp\/v2\/posts\/2550\/revisions"}],"predecessor-version":[{"id":2552,"href":"https:\/\/www.portstrategy.com\/greenport-congress\/wp-json\/wp\/v2\/posts\/2550\/revisions\/2552"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.portstrategy.com\/greenport-congress\/wp-json\/wp\/v2\/media\/2551"}],"wp:attachment":[{"href":"https:\/\/www.portstrategy.com\/greenport-congress\/wp-json\/wp\/v2\/media?parent=2550"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.portstrategy.com\/greenport-congress\/wp-json\/wp\/v2\/categories?post=2550"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.portstrategy.com\/greenport-congress\/wp-json\/wp\/v2\/tags?post=2550"},{"taxonomy":"sponsor","embeddable":true,"href":"https:\/\/www.portstrategy.com\/greenport-congress\/wp-json\/wp\/v2\/sponsor?post=2550"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}