Switching from containers to bulk vessels
I’ve traded containerized commodities for about 3-5 years now (Don’t want to be too specific). I’ve traded a few different agri commodities and one hard commodity during that time. I’m getting bored with the container market. Margins are getting worse and there’s so much work involved to execute small trades. I want to move into bulk vessels. Has anyone here made that jump? Are my container skills transferable?
I’d suggest doing a lateral switch to a firm that trades cargoes on bulk vessels. At least you would have your product/quality knowledge and at least a network.
Different beast when comparing container versus dry bulk. Easier to learn if you have understanding of tramp ships than using container knowledge, just a steeper learning curve.
Container bookings are very shipper/consignee friendly. Plus a vast amount of outsourced providers like freight forwarders that can do logistics for you making things quite easy.
I’d suggest you read up about dry bulk chartering and pick up basic shipping terminology. Understanding a charter party, and risks associated in loading and discharging operations. How freight is assessed and supply/demand dynamics. This is a whole different market itself.
Thanks for the solid response. I’ve been looking at moving shops. Probably going to leave once my differed comp vests. What’re your thoughts on the institute of chartered ship broker certificates? I’ve been looking at doing their basic diploma in dry bulk chartering just to have a slightly more concrete study plan. I figure nobody in the industry would value the piece of paper but it might help me build a better knowledge base. Not sure how true that is.
Not 100% sure I understand how containers vs bulk matters for your margins. Do you want to move into bulk vessels or bulk commodities?
In every product I’ve traded with containers margin per ton should be higher than a bulk vessel because of the lower volume/higher touch per ton. The problem is the barrier to entry is very low so you get a ton of midsized companies all eroding margin.
I see. Hmm not sure I totally agree. Cargo values are a barrier to entry in terms of financing but margins on a lot of bulk stuff are orders of magnitude thinner than on most anything you would put in a container. The margins on the big dry bulk commodities are absolutely minuscule, the logistics often make or break it.
Adding to this thread: is it normal to trade both refined and concs together or do most shops separate the two? Is concs inherently more interesting b/c you can do more with grades/blends compared to refined?
There is a lot of overlap in terms of shops who trade both but at the bigger shops the roles are usually somewhat separate.
I don't know if one is better, probably more margins to be captured and a more wild west approach to concs make it more interesting on paper, let alone the grades/blends aspect. That said refined metals have an even closer link to the LME, other games to be played there.
Gotcha.. I guess I had the mistaken impression that it was common for metal traders to play with the whole supply chain, from mine through to the final refined product. I'm still an intern but from the sound of it concs would be more down my ally if I had the opportunity.
Sunt tenetur possimus ut illum. Cupiditate qui voluptas et labore voluptatem. Molestiae culpa ratione autem aut distinctio dolor qui.
Qui ex ut sint quidem perspiciatis. Praesentium ratione quisquam praesentium dicta est consequatur excepturi. Totam est velit non consequatur earum. Magni ducimus aut voluptatem. Non qui dignissimos quo aut adipisci. Est vel debitis occaecati similique.
See All Comments - 100% Free
WSO depends on everyone being able to pitch in when they know something. Unlock with your email and get bonus: 6 financial modeling lessons free ($199 value)
or Unlock with your social account...