What is a Bulk Vessel?

When most people think about vessels, they picture containers stacked 20 high on the deck of a ship. And that makes sense since most consumer goods are shipped in containers. But despite getting most of the attention, container ships carry only a small proportion of global seaborne cargo by weight. The majority of commodities are transported on either dry-bulk or liquid bulk vessels.

In container shipping, tens, sometimes hundreds of different companies may book containers on a shared vessel. In bulk shipping a single company (charterer) usually hires the entire vessel for that cargo or a set time period.

Bulk vessels are used where it is either economically cheaper than containers given cargo volume, or containers are not feasible due to the nature of the cargo such as liquid commodities like crude oil.

Bulk vessel capacities are listed in deadweight tonnage (DWT), which is the maximum weight including everything the ship transports - cargo, fuel, provisions and stores, and the crew and passengers. This means a 180,000 DWT vessel cannot carry 180,000 tons of cargo because fuel, ballast water, stores and other operational requirements also consume part of that allowance.

For traders, freight rates are often quoted based on vessel size, so understanding DWT is important when calculating transport costs and economics.

Dry-bulk vessels are used to transport dry commodities such as iron ore, coal, grain, fertilizers, bauxite, alumina and metal concentrates. These commodities are often shipped in much higher volumes than refined base metals. Vessels range in size from Handysize carrying 10,000-40,000 DWT, all the way up to Ultra-large ore carriers (ULOCs). ULOCs are specific vessels designed to carry iron ore from Brazil or Australia and can carry up to 400,000 DWT on a single voyage. Cargo is distributed evenly directly inside the holds to maintain the ship’s balance during the voyage. This is extremely important given the length of some voyages, and the varying sea conditions they have to navigate.

Wet-bulk carriers, also known as tankers, are used to carry liquid commodities such as crude oil, refined petroleum products, liquefied natural gas (LNG), chemicals, and edible oils. Similar to dry-bulk vessels, they come in a range of sizes from coastal and Handysize up to the largest ULCCs with capacity of up to 550,000 DWT - depending on the density, this is the equivalent of approximately 4 million barrels of crude on one vessel!

These wet-bulk vessels have dominated commodity headlines recently, with many delayed or unable to transit the Strait of Hormuz while the waterway remained effectively closed for the last two months. And while the outright prices of crude oil and other commodities have captured the headlines, understanding how commodities are moved is just as important. Freight costs, vessel availability, and shipping disruptions can all materially affect physical trade flows and profitability.