J. Lauritzen is looking to turn its dry bulk business into a pure play carrier focused on the smaller vessel types, Handysize, once its existing and long-term commitments to the larger Supramax vessels expire, CEO Mads P. Zacho tells ShippingWatch.
The growth came somewhat quicker and has been slightly stronger than we anticipated”
— Mads P. Zacho, CEO, J. Lauritzen
Lauritzen Bulkers currently has 10 Supramax vessels on long-term time charter contracts, of which the longest ones are set to run another 6-7 years.
“The carrier will continue to deliver when customers from time to time ask us to take on a Supramax cargo, but all resources will be aimed at the smaller vessel types in the Handy segment,” says Zacho:
“We’ve historically been the most profitable in Handysize. That’s where the customers know us, and that’s where we already have a very large presence. We want to keep strengthening this.”
100 dry bulk vessels
75-80 percent of J. Lauritzen’s volumes have traditionally been in the Handy segment.
“Our knowledge of the market and dynamics is biggest in Handysize. This is where we have the customer contacts and employee focus. In Supramax we’ve always been a much smaller player than the others in the market, and as such, it’s difficult to achieve the same level of information as in Handy,” says Zacho.
J. Lauritzen’s dry bulk business currently covers 10 owned Handysizes and close to 20 on long-term time charter contracts. The rest of the bulk fleet consists of vessels hired on shorter contracts, typically for single cargoes.
Lauritzen Bulkers operates a total average of around 100 vessels, or around the same level as in recent years, a period in which the global dry bulk sector went through one of the worst industry crises in memory-
However, the dry bulk market has in recent months and across the various ship types experienced improvements that still seem to hold, and the market is being described by players in the sector as “hot” right now.
“The market has improved on the short term. This is not surprising, as there are, for instance, a lot of grain that needs to be shipped late in the third quarter and early in the the fourth quarter. But the growth came somewhat quicker and has been slightly stronger than we anticipated,” says Zacho.
Like other carriers and analysts, J. Lauritzen expects that the dry bulk market will be a bit better in 2018 and 2019, as the large orderbook in the sector has largely been delivered by now.
“We project a moderate, gradual improvement over the next two years. Even if we see some renewed ordering activity in the coming quarters, the vessels will be delivered two years from now at the earliest,” says the CEO.
Danish dry bulk carrier Norden has also in recent years simplified its exposure to various vessel types, and the carrier has, for instance, left the Capesize segment.
English Edit: Daniel Logan Berg-Munch
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BY DANIEL LOGAN BERG-MUNCH