An Overview of the Dry Bulk Shipping Industry

The aim of this chapter is to discuss the economics of the dry bulk shipping market and explore different markets within this sector. The dry bulk shipping market has expanded significantly over the past 70 years and contributes to the world economy and growth by transportation of industrial raw material from production area to consumption regions around the world. The dry bulk shipping sector has been classified into different sub-markets according to vessel sizes, which has been the result of transportation requirements and parcel size of different commodities, including iron ore, coal, grains, bauxite and alumina, and phosphate rock, as well as other minerals and minor bulk commodities such as fertilisers, cement, and rice. There are four different submarkets within the dry bulk shipping: the freight market, the second-hand market for ships, the newbuilding market, and the scrap or demolition market. In this chapter we explore the characteristics and development of each market and review the studies investigating the determination and behaviour of freight rate and ship values in terms of price dynamics, seasonality, and volatility.