Dry Bulk Freight: Why Two Similar Voyages Can Have Different Rates

Two dry bulk shipments can have the same quantity, similar distance and even the same commodity — yet receive different freight quotations.

Freight is not calculated from distance alone.

Owners also consider:

• vessel position;
• ballast distance;
• loading and discharging rates;
• port costs;
• bunker prices;
• draft restrictions;
• cargo stowage factor;
• waiting time;
• market supply of suitable tonnage;
• the vessel's next employment.

This means that a rate fixed last month cannot automatically be applied to a similar voyage today.

Vessel position is particularly important.

An owner with a vessel opening close to the loading port may quote aggressively because the ballast voyage is short. Another vessel located hundreds of miles away may require a higher freight simply to reach the cargo.

Port productivity also matters.

A cargo loading at 8,000 tonnes per day has a different time cost from the same cargo loading at 2,500 tonnes per day.

For this reason, useful freight comparisons should be made against the current market rather than against a historic number alone.

Kiev Shipping works with dry bulk tonnage in the Black Sea, Mediterranean, Continent, Baltic, Red Sea and Middle East markets and compares available vessel positions before negotiating freight.

A realistic freight indication is therefore a snapshot of the actual market for a specific cargo and laycan.

See our dry bulk cargo chartering services.