News

Navig8 Eyes Dry Bulk

Tanker pool Navig8 is moving into dry cargo, writes Crystal Chan

Fairplay has learnt that Navig8, based in London and Singapore, is now running a four-ship Supramax pool, Supra8.

Navig8 Bulk MD Matthew Neal told Fairplay: “The dry bulk market is depressed and yet the fleet size continues to grow, giving rise to an urgent need for operational consolidation through pooling.”

The oversupply of tonnage has spawned tanker pools in recent years, with set-ups such as Nordic American Tankers, Tankers International, Heidmar, Handytankers, Taurus Tankers, Straits Tankers, and Nova Tankers.

More Supramaxes are expected to join Supra8 and Navig8 believes its experience in managing pools could make the concept work for dry bulk carriers too.

“This [pooling] has been an ongoing trend in the tanker market and, given similar circumstances in the dry bulk market, we expect to see something similar materialising,” said Neal. “Navig8 has a strong track record in setting up pools and would be a natural and key player in this necessary process.”

Neal was quick to point out that, since its inception in October 2010, its VLCC pool, VL8, has grown from one to 15 ships. Navig8 also has pools for chemical and products tankers.

He said: “With other pools, they have added bargaining power to shipowners, with more VLCC tonnage managed professionally while benefitting from the scale and market position. This scenario of ‘more ships in fewer hands’ has no doubt contributed to the stabilisation of the VLCC market.

“Furthermore, this diversification also came about very naturally as a result of Navig8’s established, logical, customer base and strong internal infrastructures.”

Navig8’s in-house bunker trading company helps the pool to obtain the cheapest bunkers and its offices in Westport in the US, London, Shanghai, Singapor¬e, Dubai and Seoul, give the pool 24/7 worldwide coverage, allowing it to exploit opportunities for customers.

The pool operator’s attention to arbitrage opportunities enabled it to reposition the Supra8 ships in the Atlantic to avoid being stuck with sliding rates in the Pacific, where cargoes are scarce.

Navig8 thought it was logical to start its dry bulk operations with Supramaxes, given that almost 300 such ships are scheduled for delivery this year and the fact that the Supramax sector is relatively fragmented.

IHS Fairplay Sea-web data shows more than 190 Capesizes and more than 420 Panamaxes scheduled for delivery this year.

The Supra8 pool is being seeded with chartered-in tonnage and, Neal said: “Navig8 does have projects in other dry bulk sectors and remains open to partnerships.”

- Article is taken from Fairplay on the 14 June 2012