Overview

Drivers

Financial Analysis

Industry Performance

Introduction

Market Size

Business Model

Key Players

Market Share

Competition & Threat

Industry Growth

Customers

Suppliers

Cyclicality

Seasonality

M&A & other Developments

Dry Bulk Shipping Industry

Introduction

Dry Bulk Shippers are vessel operators that deal primarily in shipping “dry” commodities across the

world. The primary cargo of these operators includes iron ore, coal, and grain, which are shipped on

vessels of various sizes ranging from Handysize to Capesize, capable of transporting 10,000-400,000

deadweight tons (DWT).

Market Size

Overview

The Dry-Bulk Shipping sub-industry falls under both the Industrials sector and the Marine sub-sector.

Mkt. Cap ($) Revenue Change (YoY)

Sector Industrials 7.69 tr 1.44%

-Industry Transportations 1.67 tr 2.97%

--Sub-Sector Marine 181.5 bn -1.16%

---Sub-Industry Dry Bulk (US Listed) 5.82 bn

Market Share

Competition and Threat

Players in the industry not only compete with one another, but also with outside players. The

companies compete with each other in all four modes of transportation: air, land, rail, and sea.

Dry-bulkers, to a great extent, are immune to cargo movements on air, land, and rail since major

commodities shipped intercontinentally have few options, among which marine transportation

provides the best cost-benefit balance.

Barriers to entry in the industry are rather low; an operator can break in to the industry with a single

vessel.

Industry Growth

Global Cumulative Dry Bulk 2011 2012 % Change

Total Revenues ($m) 32,705.3 23,705.8 -37.9

Global Cumulative Dry Bulk 2012 2013 % Change

DWT (mil l ions) 584 623 7

No. of Vessels in Service 8,428 8,823 5

No. of Vessels under

Construction462 341 -26

Key Players

The marine transportation business includes both public and private entities. Large and diversified

operators are primarily based out of China, Japan, or Greece. These operators transport almost

everything ranging from dry bulk to liquid/dirty cargo such as crude.

The following are the most prominent names within the dry bulk segment for US-listed companies:

DryShipsDryShips Inc. (DRYS) is the largest US-listed vessel operator. The Greece-based company primarily

focuses on dry-bulk transportation. DryShips currently operates a fleet which includes 36 dry-bulk

vessels, which in total have a combined volume of a little over 3.5 million DWT.

The company also operates drilling rigs, submersible vessels, and tankers through its various

subsidiaries.

Navios

Business Model

Companies operating in the dry-bulk shippers sub-industry either own or lease a fleet of vessels that

are loaded with cargo to be delivered across the globe. Major commodity exporters include Australia,

Brazil, and the US for coal, iron ore, and grain respectively. On the other hand, major importers

typically tend to be the emerging markets, specifically China.

Navios Maritime Holdings Inc. (NM) is a holding company with subsidiaries all around the globe. The

company was originally formed by US Steel to transport iron ore to its mills in the US and Europe.

Now, the Piraeus, Greece-based company operates 49 vessels to ship exclusively dry-bulk

commodities. The company has total capacity of 5.1 million DWT.

Suppliers

Suppliers for the industry include some of the largest shipbuilders in the world.

Top 10 shipbuilders in the world with respect to gross tonnage are all based out of Asia with the largest 3

companies being located in South Korea. These include:

Hyundai Heavy Industries

Daewoo Shipbuilding

Samsung Heavy Industry

Cyclicality

The industry cyclical in nature where growth comes from transportation of goods and commodities

across borders. The industry is dependent on trade between countries and overall improving

conditions around the world.