One of the world's largest dry bulk carriers, Lübeck-based Oldendorff Carriers with a fleet of about 500 vessels, can once again look forward to a positive result at a time when many competitors continue to struggle.
The carrier, which is owned by the German Oldendorff family, does not release specific numbers from the financial reports, but a spokesman tells ShippingWatch that it expects a positive full year result for 2015. The profit this year follows a positive result in 2014, which was also a difficult year for a majority of the dry bulk industry.
"The year is developing better than expected so far. We expect 2015 to be a profitable year," says Oldendorff Carriers in a comment after the first six months of the year.
With its size, the German carrier, along with Geneva-based Cargill Ocean Transportation, is among the heavy weights in the dry bulk segment that all the other players keep an eye on. With about 500 vessels in the fleet, both carriers have shown this year - and last year - their resilience to the crisis which has otherwise had a widespread impact, and which is attributable to factors including the surprising dive in the Chinese import of coal, which occured in the fall of last year.
Oldendorff Carriers points to the fact that the positive development can be attributed to having had the ability to secure a part of the cargo which is still there in spite of it all.
Buyers keeping stocks low
"The iron ore volumes are increasing, but the coal volumes remain challenging due to the reduced imports of China. The market development so far in our view is a result of a continuing oversupply of vessels, even though the volume of cargoes is very decent. What adds to that is the fact that congestion levels are low with buyers managing to keep their stocks low, because all commodities are available on short notice," the carrier explains.
A blend of declining growth in China and continued low global growth is the major challenge for dry bulk carriers globally. In addition, some unrest has arrived to the Asian stock exchanges and not least the stock exchange in Shanghai, which has caused new concerns for the bulk operators. Oldendorff Carriers has tightened its risk management of the customers significantly following the financial crisis. And this caution along with close relations to the customers have been staples of the German carrier.
Size is also a factor that currently seems to make a difference in a difficult market, noted president Roger Janson, Cargill Ocean Transportation, in an interview with ShippingWatch in March this year. It is about having an organizational critical mass, so that one can react to signals in the market as soon as they occur.
Important market understanding
"The organizational size provides us with the tools to have an analytical understanding of what goes on in the market. With representations and offices in 67 countries, effective networks, good contacts with governments and insight from local teams we have been able to receive important firsthand knowledge. An example of this is China, where I believe competitors overestimated the market. We were a lot less optimistic than our peers," Roger Janson told ShippingWatch back then.
Oldendorff Carriers puts its trust into the tendency of more dry bulk vessels being scrapped, and that this will continue this year, leading to a noticeable reduction in the global fleet - and thus fewer ships fighting for the total amount of cargo.
"The world fleet is facing more scrapping than expected. This may lead to a better utilization in the near future," the carrier says.
Oldendorff Carriers is relatively stable around 500 vessels in all segments. The vast majority are chartered ships. 45 owned, but this number is expected to increase to over 70 vessels when the current newbuilding program is completed. The carrier is especially strong in the spot market.