Willem Vermaat, Shipping Director at Heidelberg Materials Trading, was a panellist on the “Risks to Global Trade” session at the Emirates Shipping Congress on 6th May. He shares his perspective on the state of dry bulk shipping below.

According to UNCTAD, about 80-90% of the products we surround ourselves with have been on board a ship in some form. Iron ore from Australia is used to produce steels in China, then shipped to Korea/Japan to produce cars which are then shipped to Europe. Fertilisers from the Middle East are shipped to USA where they are used to grow soybeans which are then shipped to China. 

These interconnected journeys reveal just how deeply our everyday lives rely on the vast, often unseen networks of global shipping. And while there is some degree of normality in these routes, and we can anticipate volumes and thereby the required tonnage in certain areas, there is a plethora of factors that can interrupt these flows. 

Weather factors can influence the crop quality/quantity, climate changes can flood mines or alter the available forest areas for harvesting. Whilst these are natural matters beyond our control, there are numerous human-controlled factors that can disrupt this highly-optimised network. 

A growing patchwork of emissions regulations is emerging, with each region setting its own targets. Vessel managers of worldwide trading tonnage will have to be knowledgeable about these. 

Then there are geopolitical factors that can change the market dynamics almost instantly. These could be wars or warlike situations, or as we have seen recently, with threats of imposing tariffs and fees which may (or may not) become actualised.

It is within this environment of disruptions that the paradox lies; whilst disruption will bring challenges, it is also here that possibilities and opportunities arise. If your organisation has a high level of adaptability and agility, for example being able to identify alternative trade routes, change stem sizes or manage different fuels, you will be able to absorb or even take advantage of these disruptions.

Whilst the saying, “it is not what you know, but who you know” is valid in most industries, within the ever changing and disruptive environment of dry bulk shipping, “agility over knowledge”, the ability to adapt and learn quickly, is rapidly becoming more valuable than simply possessing knowledge.