The dry bulk sector is on the road to recovery thanks to a strong perfor- mance in Q4 2017. However, the industry must target improvements in profitability to ensure that it remains financially buoyant in 2018. Neil Godfrey, Group Sales Director at GAC, explores the role ship agents can play in supporting the overall recovery of the dry bulk market.

There is a new air of optimism in the dry bulk sector. Exponential growth in demand for imports from China fostered an overall dry bulk demand growth rate of 5% — a three-year high, according to BIMCO. Major contributors to this growth included a new world record in steel production of 74.6mt (million tonnes) set by China in August 2017, as well as iron imports in the same country that exceeded 100mt for the first time in September 2017. These are just some of the key factors that led to several ship owners and operators reporting a profitable Q3 and Q4 2017. There is a tangible sense of guarded relief at change of fortune, as 2016 was seen by many as one of the worst years in the history of dry bulk. If the 2017 performance trend continues, ship owners could be looking at profitable business throughout 2018.

Despite the positive signs, many ship owners and operators remain justifiably cautious in Q1 2018. They are mindful that the financial success of the sector is heavily dependent on China’s continued strong appetite for dry bulk commodities — something which will be largely dictated by momentum of the nation’s ambitious Belt and Road Initiative driving infrastructure development across Asian trade routes. Other regions of influence, according to BIMCO’s chief shipping analyst Peter Sand, include India, South Korea and Malaysia, where coal demand will have an impact on the dry bulk market.

Sailing speeds is another factor that will influence the success of the dry bulk market in 2018.

The benefits of slow speeds to control fuel consumption and costs will be weighed against the imperative to get commodities to and from their markets within short time scales.

With the market dynamics surrounding the dry bulk industry remaining uncertain, many ship owners and operators are looking to control and limit OPEX costs including repairs and maintenance, crew costs, insurance and ship agency. And yet, the latest figures from GAC suggest that ship owners and operators are not willing to compromise on quality to secure the lowest OPEX costs. This is evidenced through GAC’s ship agency business, which has achieved a 5% growth in dry bulk port calls in the last year.


Ship agency success in dry bulk shipping depends on the agent getting the vessel into port, loaded, discharged, serviced and on its way again in the quickest, safest and most economically efficient way possible. It’s a major operation which relies on a trusted and experienced agent with local presence, trained staff, financial stability, international resources and a robust safety and compliance culture. GAC’s global ship agency network offers a range of services including full agency and cargo operations, protective agency, husbandry, hub agency and disbursement account management, ship supplies and launch services, as well as complementary support like bunker fuel supplies, hull cleaning, weather routing, maritime training, terminal services and ship spares logistics.

In 2017, GAC handled 10,500 dry bulk port calls involving a range of clients including international and local commodity traders, national and international utility companies, owners and operators across sectors that include coal and coke, ores and concentrates, fertilizers, grains, sugar, and biomass. Services were delivered from key dry bulk hubs in Brazil, Australia, India, Indonesia, South Africa, USA, Russia,Turkey and — critically — China.

GAC’s strong performance in dry bulk — amid tough market conditions — is a testament to the prudent procurement strategies of ship owners and operators, who recognize the role of an agent’s experience, global resources, quality of service and certification in obtaining value for money. The group’s policy of rigorous adherence to the evolving spectrum of compliance policies and procedures in play within the industry make it the agent of choice for many owners and operators. Dry bulk shippers want to know they can depend on compliance and quality from their agent — after all, costs quickly mount up when mistakes are made. If an agent fails to comply with health and safety regulations and an incident occurs, the financial and legal implications for the ship owner are substantial.


As the green shoots of recovery continue to emerge in the dry bulk sector, dry bulk owners and operators are looking to make informed ship agency procurement decisions with the long-term sustainability of their businesses in mind.

It’s a given that ship agents must keep in mind the ever-changing needs and expectations of owners and operators. But in a sector where uncertainty still lurks beneath the surface, they must keep a close eye on their competitors and key trends like the fluctuations in demand from China, slow steaming, changes in cargo flows within different commodity sectors and the ever- growing range of compliance policies and procedures in play. Ultimately, reliable and competent ship agents will be key partners in helping owners and operators to sustain improving fortunes in the dry bulk sector.