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“Nord-Power” is the latest addition to the Norden fleet.

Bulk Copenhagen: More than 400 bulk carriers controlled from Copenhagen

When a powerstation at Mumbai, India, receives a cargo of coal from Australia, it has crossed over a desk in Copenhagen. Also, when a cargo of soya arrives in Fredericia, Denmark, from Argentina, a cargo of pulpwood logs arrives in Norway from Brazil or a cargo of cement clinkers leaves Gdansk, Poland, for West Africa, it has most likely been over one of the many desks in the shipping offices in Copenhagen.

“Bulk Copenhagen” is what one could call a phenomenon which has developed over some years. Throughout the 1970’s and up to today, Danish shipping companies have developed a type of business called Time Charter operators: sailing customer cargo around the world in bulk carriers owned by others.
There have been ups and downs in the market but as of today, Danish operators/owners hold a fair share of the bulk market which has been healthily high for a couple of years now. During the last month or so it has been down to “normal” levels, but everybody expects it to rise again during August and September. “Just a summer vacuum”, is the reaction amongst bulk operators. Still, the prospects are good as China pulls in the right direction, with a growth rate higher than anywhere else on the planet.

D/S Norden among the oldest
On the Danish scene, some of the major players in the bulk market are: D/S Norden, D/S Torm, the Clipper group, Lauritzen Bulkers, Eitzen Bulkers and Atlas Shipping. Dampskibsselskabet Norden is one of the oldest operators on the bulk market. Norden started with bulk carriers in 1973, when a new-built vessel was delivered from Mitsui in Japan as the fleet’s first industrial bulk carrier.

Today Norden is one of the majors operators, with a fleet of over 100 vessels in a combination of owned vessels (only a few), chartered vessels (with an option to purchase) and “normal” time-chartered vessels. During the last decade, Norden has developed a type of time chartering with purchase options together with Japanese trading houses. They provide the ships and sail them, often with Filipino crew under a Panama flag. Norden handles the commercial management and holds an option to take over the ship after a few years.

At the moment Norden has 21 sailing bulk carriers, and furthermore an order for some 23 bulk carriers under these same conditions. At present, Norden is in the process of taking over some of the time-chartered bulk carriers. Amongst them is the Nord-Kraft, which has been sailing since 2000, and from this month will be the largest dry cargo vessel under Danish flag, according to the contract signed six years ago. The Nord-Kraft is a 171,199 DWT ship. Norden has also extended its fleet with the Nord-Power, a 176,346 DWT newbuild ship from Universal Shipbuilding Corporations Tsu Shipyard in Japan.

Lauritzen Bulkers
The Danish shipping group J. Lauritzen’s subsidiary Lauritzen Bulkers (Labas) has also become established as one of the market’s operators for a number of years. Labas has been concentrating on the handy-size segment for years (up to 40,000 DWT) handling all kinds of cargo and operations in the Atlantic basin for three decades. At the moment Labas operates some 70 units, several of which are trading in the pool set up with Island View Shipping (the bulk arm of the Safmarine, which in 2001 was purchased in a management buy-out). Most of the fleet consists of geared bulk carriers, but lately Labas has taken a few Panamax-units on time charter and even a Capesize unit. However, the core-business is still in Handysize.

D/S Torm is also a bulk operator, but mainly in Panamax and only “normal” gearless Panamax. Currently Torm has two Handysize bulkcarriers of the log-carrier type trading. Torm started its bulk trading with a gearless bulk carrier and a number of geared bulk carriers in the mid 1960’s.

Massive fleet
Other operators in Denmark are: Eitzen Bulkers with some 40 units on the fleetlist, the Clipper Group with some 120 bulk carriers in its fleet, and Atlas Shipping operating 32 units.

Eitzen Bulkers started as the bulk department of the East Asiatic Company, which sold the bulk business to Tschudi & Eitzen, the business becoming Eitzen Bulkers when the Norwegian shipping group split up in 2003.

The Clipper Group has built up a massive fleet of new ships during the last ten years, mainly from Chinese shipyards. The large fleet has been built up with partners who usually participate as investors (take stakes in the ships), making the fleet a partner fleet. The first series of bulk carriers to be built in India is currently under construction to fill the market space for new tonnage.

The Danish operators hold a fair share of the worldwide market, especially in the small bulk carrier sector. Handysize, Handy-max and Panamax are the main segments in which the Danes work. Some 400 units controlled from Copenhagen, of the world total of 5,955 bulk carriers, is a good share claimed by several bulk operators in Copenhagen. The 400 ships rate quite high in the segments if the tally is made amongst ships ranging from 14 years of age to newly built. The tally is thus 2,503 units and gives the Danish operators a market share of 16 per cent.

D/S Norden and Lauritzen Bulkers are working in the Capesize segment as the only Danish operators. Capesize is pure industrial bulk shipping. It mainly comprehends commodities like ore and coal which go to a couple of dozen receivers, leaving only the price to compete on. Capesize hauling is by far the largest kind of bulk shipping, as Capesize units take the largest cargo volumes. The Capesize segment is served by 687 bulk carriers of 110 million DWT.

In the other segments, Handysize and Handymax, the Danes have given the business a personal touch. Said by several operators: “Everybody can sail a bulk cargo from A to B, but we can give the business a personal touch. We have learned over the years that we are not only shippers, but can provide the customers with a lot of service when loading or discharging. If the receiver of the cargo wants to have the discharge done in a special way, it is no problem. We can handle cargo in all sorts of ways.”

Personal touch
Another strong touch in the Danish bulk business is the fact that most operators have branch offices in the majority of the interesting areas. Rio de Janeiro, Houston, New York, Annapolis, Durban, Melbourne, Mumbai, Singapore, Shanghai, Hong Kong, Tokyo, London and Rotterdam are the cities covered through branch offices.

Jakob Meldgaard, head of D/S Norden’s dry cargo department puts it this way:

– By having our own personnel on location we can give the customers a much better service. It is much easier to develop a good business if an Indian person calls a Mumbai phone number rather than a Danish number. Also the person on location can much better combine the local way of developing business with our way of doing business; combining our business values with local tradition.

– The right person on location can really make the difference between doing business or not, says Jakob Meldgaard.

Steady income
D/S Norden operates the traditional way on a number of its businesses, but also has a number of customers that are served in an untraditional way.

– We have several long-term customers with whom we have developed a customer-shipper relationship giving both, or all three, the best possible outcome over a span of years. Instead of following the market, we have made long-term agreements giving us an average price of a certain amount of coal. It gives the customer a more steady price level to work with, and we have a more steady income from our position, says Jakob Meldgaard.

Another way of conducting bulk business is practised by Eitzen Bulkers. They have been very keen from the start on affreightment contracts, and taking the business from there. That means that Eitzen Bulkers commit themselves to ship, lets say, 200 000 tons of steel from South America to the US East Coast. And from that point Eitzen Bulkers play the market with tonnage, instead of first acquiring tonnage and then having to find suitable cargo for the ships.

//Bent Mikkelsen