Welcome to BLK Shipping, our regular update from the shipping market. In this issue, we’ll be covering:
Wet Cargo
Dry Cargo
Containers
Gas
Subscribe to our newsletter to stay up-to-date with our Shipping Weekly and follow us on Facebook and LinkedIn to never miss an update.
Wet Cargo
The increasing price of crude oil has been driving the tankers’ charter rates up, although the availability of VLCCs meant a general slowdown for this segment.
VLCC – Very Large Crude Carriers saw a decline over the past week, primarily due to the oversupply of tonnage in the market. Outlook: Stable
Suezmax – strong rally Sith over 1800% increase WoW for suezmaxes, with a very strong performance, especially in the Mediterranean. Outlook: Positive
Aframax – afra rates more gained ground, with a general strengthening across most routes. Outlook: Positive
Dirty Products – Apart from the usual busy market in the Med and Black Sea, demand remained weak in all other regions, causing rates to soften. Outlook: Stable.
Clean Products – Charter rates weakened across the board with some routes losing over 50% WoW. The MR market remained relatively oversupplied, and the lack of available cargoes did the rest to cause charter rates to slip by an average of 10% Outlook: Negative
MR – weakening demand did not support the MR rates, which, coupled with the oversupply of carrying capacity in the market, caused rates to fall across the board. Outlook: Negative
LR1 –demand for log-range tankers fell in the last few weeks and continues on a downward trend. Outlook: Negative
LR2 –LR2 tankers weakened approx. 20% WoW but, on average, remain still strong compared to this summer. Outlook: Stable
Handy –Handy earnings weakened too, returning below $3500/day and losing all the ground gained in September Outlook: Stable
Dirty Panamax – Rates softened on most routes, bringing Panamax rates down 22% compared to last month. Outlook: Negative
Dry Cargo
Strong performance for the bulkers on most routes and across all segments, with rates at their highest levels in over 10 years.
Capesize – Capes grew up to 30% in the last week, averaging nearly $73k/day and rates climbing sharply to unchartered heights. Outlook: Positive
Panamax – Still another good week for the panamaxes, although slightly in decline on the Atlantic and on the routes Indonesia to China. Outlook: Positive
Supramax – Supramaxes lost ground in recent days, after climbing steadily over the course of 2021. The second half of September saw relatively steady rates, settling on an average of $30k/day Outlook: Stable
Handysize – Handy market still performing very well. After a strong July-August rally, a slow-down in September now it settled on $36k+/day with short voyages routes fetching over $40k/day. Outlook: Stable
Container
Container rates finally found some market resistance, with Neo-panamaxes vessels finding difficult to push much above the $145k/day mark.
Backlogs in major ports are gravely disrupting supply chains, with queues of over 70 container vessels at Long Beach and other major ports in the US, Europe and China.
We are now seeing, as predicted, a decrease in smaller-batches shipments westbound from Asia to Europe, accompanied by a subsequent easing of the TEU rates which now came down on the high $8000s mark.
Outlook: Stable
Gas
Rates for Gas Carriers rallied, driven by the strong demand for gas worldwide and the surge in prices across Europe and North America.
Pressurized and semi-pressurized vessel rates remained constant, whilst the biggest winners appeared to be LNG carriers, with rates now nearing the $85k/day for 160000 m3 vessels.
Outlook: Positive
To learn more about how we can support your business shipping as cheaply and environmentally-friendly as possible, visit us at BLK.
Subscribe to our newsletter to stay up-to-date with our weekly shipping updates.
Did you miss our previous shipping article? Read it now.
Welcome to BLK Shipping, our regular update from the shipping market. In this issue, we’ll be covering:
Wet Cargo
Dry Cargo
Containers
Gas
Subscribe to our newsletter to stay up-to-date with our Shipping Weekly and follow us on Facebook and LinkedIn to never miss an update.
Wet Cargo
Oversupply of carrying capacity in the market counterbalanced significantly the rising price of oil and the tanker rates kept dropping across the board, with the only exception of VLCCs
Crude Tanker Spot Charter Rates
VLCC – Very Large Crude Carriers were the only vessels with a strong performance, given their direct link to the crude trading. China routes were the busiest with a 3.5 times increase WoW. Outlook: Positive
Suezmax – rates weakened on all routes with the only exception of the Indian Ocean, where Suezmaxes did 9% better than the previous week. Outlook: Stable
Aframax – the Med remained the only area where Aframaxes keep performing, with a general, continued declined that went on throughout September. Outlook: Stable
Crude Tankers Spot Charter Rates
Dirty Products – Relatively busy in the Mediterranean, whilst demand remaining weak in all other regions, with a marked oversupply of carrying capacity. Outlook: Negative.
Clean Products – Charter rates weakened across the board, especially for short voyages. Outlook: Stable
Product Tanker Spot Cargo Rates
MR – uptake in demand did not have the expected positive effects on MR rates, owing to the oversupply of carrying capacity in the market. Outlook: Negative
LR1 –demand for log-range tankers fell in the last few weeks. Outlook: Negative
LR2 –continued decline in LR rates would appear to continue on this trend as plenty of vessels remain unemployed. Outlook: Negative
Handy –Handy earnings bounced back below $4000/day with a weakened performance on all routes except the Med. Outlook: Stable
Dirty Panamax – Rates continued softening pretty much all routes, with a recorded drops up to 30% WoW. Outlook: Stable
Product Tanker Spot Rates
Dry Cargo
Bulk carrier rates rallied during the past week with a market “on fire”and at its highest since 2008. WoW growth recorded up to 44%, pushing capesize rates beyond $60k/day on some routes.
Bulk Carrier Spot Cargo Earnings per day
Capesize – Capes were the strongest performers in a very active market, characterised by a strong demand and an undersupply of carrying capacity Outlook: Positive
Panamax – Still another good week for the panamaxes, with an average growth of 5% across the board and a decisively positive outlook. Outlook: Positive
Supramax – Supramaxes remained relatively stable, with recorded variations up to 3% and average rates just north of $31,500/day Outlook: Stable
Handysize – small-sized bulkers did relatively well in the past couple of weeks, with a continual growth now averaging $34k+/day and voyage charters smashing through $40k/day on South-American routes. Outlook: Positive
Bulk Carrier Spot Charter Rates
Container
Container rates finally look like they’re stabilising, with Neo-panamax vessels settling just above the$145k/day mark and container prices on the routes China-Europe recording an inflexion for the first time in months.
Container Vessel Average Earnings per TEU per day
On the raw materials side, however, and especially in chemical commodities, the high freight rates keep impacting prices of goods to the extent that it is equivalent or cheaper to source from European suppliers.
This has led to a decrease in smaller-batch shipments westbound from Asia to Europe which, together with the ongoing raw material shortage and increase in prices of Chinese factory outputs, provoked a subsequent easing of the TEU rates. We should continue seeing this trend toward the end of the year and possibly into 2022.
Outlook: Stable
Container Vessel Charter Rates
Gas
Rates for Gas Carriers declined slightly, with a 18% hit suffered by for 145,000 m3 LNG Carriers.
Gas Tankers Cargo Rates
This was expected as plenty of tonnage was tied-up in dock for ballast water treatment systems installation and is now slowly coming back into the market, increasing overall supply. Outlook: Stable
To learn more about how we can support your business shipping as cheaply and environmentally-friendly as possible, visit us at BLK.
Did you miss our previous edition of BLK Shipping? Check it out!
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BLK was born as the digital marketplace dedicated to commodities and raw materials.
It was born from the awareness that the digitalization of commodity trading is not a question of if, but of when.
It was born to allow anyone, regardless of the size of their company, to buy directly from producers, wherever they are, paying the real value of the goods, thanks to a transparent and digital market.
Our mission is to allow anyone to purchase the raw materials they need for their business, with a simple click. It is inevitable, we saw it happen in the late 1990s with the disruption of retail at the hands of those who are now e-commerce giants.
It will happen again, for B2B purchases. It is already happening. BLK is its driving force.
Buy raw materials for your business from the comfort of your home
The platform that allows anyone to buy securely, in a few simple clicks. It allows you to find local and global suppliers, compare prices, specifications, delivery terms. And to buy as today we are all used to doing, online, from the comfort of home.
Thanks to the automatic invoicing and order generation as well as integrated accounting, today BLK saves 1000s man hours per year in administration tasks.
Micro and small businesses, the target market of our marketplace, have halved their procurement costs (on average a reduction from 40% to 60%).
Blkcommodities.com is the home of over $1B worth of trade, and active across 7 main categories.
Agricultural
Chemicals
Energy
Construction
Main Bulks
Industrial
Metals
Our Marketplace division has been growing on a quarterly rate of 270%+ and, to date, suppliers on our marketplace trade $332M-worth of chemical commodities; $242M of metal products (including grade A steel, stainless steel and high-strength alloys); $238M of Agriculturalgoods and $219M of energy products. Find out more about our marketplace’s key indicators here.
Outsource your supply chain. Reduce fixed costs. Cut variable costs.
At BLK we put at your disposal our expertise in supply chain management, international negotiations and project management to make our partners’ operations leaner, more effective and more profitable.
We pool the volume of multiple businesses with that of buyers across the UK and Italy, using the aggregated purchasing power to negotiate better deals with suppliers globally.
We scout, vet and negotiate directly with manufacturers on behalf of our partners, organizing logistics and providing a complete supply chain management solution to keep fixed costs as lean as possible, whilst reducingvariable costs.
In this case, we address corporate and medium-sized enterprises, helping them to streamline their procurement processes, automate order generation, invoicing and reporting, with the aim of increasing their competitiveness on foreign markets.
Reduce the environmental impact of your supply chain and earn with carbon credits.
We help our partners reduce their environmental impact by purchasing from local suppliers or by aggregating volume with that of other companies. In addition, we organize logistics in the most environmentally friendly way possible, reducing the overall emissions of our customers’ supply chain.
Companies that rely on us can also earnfrom this emissioncut: their lower environmental impact is rewarded with Carbon Credits, which can be exchanged on the European Environmental Exchange.
With BLK, going green means generating a whole new revenue stream!
Quality – Cost – Service Delivery are the foundations of our criteria
BLK developed a proprietary (patent pending) rating system to assess the key metrics of our customers and suppliers.
Quality – Cost – Service Delivery are the foundations of our criteria.
We help companies understand their positioning in the market based on these three areas and support them in improving their positioning through a detailed guide that translates into operational and actionable advice.
In addition, our rating provides further confirmation of the standing of suppliers, allowing those who buy to base their decisions on relevant parameters and on the awareness of having available commercial partners previously evaluated with a thorough level of scrutiny which goes beyond the mere financial report.
Investor Relations
Headquartered in Glasgow, BLK has been selected as one of the UK’s top 30 tech start-ups.
After a seed round concluded in January 2021, we are supported by Italy’s #1 accelerator and one of Europe’s top venture builders: Enry’s Island. We have a 10-strong team distributed between the UK, Italy and the United Arab Emirates.
Team
Led by founders from shipping, commodity trading, project management and banking, the BLK team is structured in four units: Product, Market, Fundraising and Corporate, each in charge of specific tasks and well positioned to support BLK’s rapid growth.
Product: designers and developers
Market: one-to-one sales, one-to-many sales and digital PR
Fundraising: investor relations
Corporate: HR, legal, supply chain
Discover More
To learn more about how we could build a strategic partnership, both industrial and fundraising, contact:
Gabriele Dadò – Founder & CEO gabriele.dado@blk-global.com +44 7757630638
QUALITY – COST – SERVICE DELIVERY ARE THE FOUNDATIONS OF OUR RATING CRITERIA.
Here’s how we specifically assess “Service Delivery”.
A background check must go beyond the mere credit report, which is readily available for the vast majority of the business anyway and does not give a true reflection on the actual operational profile of a company.
Standard credit reports fall very short of evaluating a business’ quality, its positioning in relation to cost and, most importantly, service delivery.
For this reason, BLK has developed a proprietary evaluation method, currently used as a reference standard within the commodity trading and chemical manufacturing industries and validated on hundreds of clients already.
The BLK Rating, which covers in detail not only financials but Quality, Cost and Service Delivery, with a deep scrutiny on companies’ environmental footprint as well, paints a comprehensive picture of a business’ real position and capabilities.
In this article, we’ll look specifically at how BLK assesses Service Delivery to build the overall company rating.
Service Delivery is a mix of multiple factors. It’s not merely “how well did a supplier do on this specific order”. It’s about a business’ overall approach to continual improvement and it translates into how to operationally fulfil orders as swiftly, efficiently and effectively as possible.
1. Number of Warehouses / Plants
The number of plants and warehouses gives an indication on the scale of a business operations and on its capacity to promptly serve customers in a specific geographic area.
A high number of plants means high output capacity and high number of warehouses is likely to signify prompt stock availability and quick order dispatch upon reception of orders.
2. Average Lead Time
Yet, scale alone is not a good indicator of “how well a company performs” or “how well does it fulfil its contractual obligations”. On the contrary, scale can oftentimes be detrimental, with more level of approvals, more bureaucracy and less flexible organisational structure that slows down the whole process.
Most large corporates suffer from this disease and it is therefore critical to assess a company’s actual lead time from order reception to dispatch in order to have clear visibility of its fulfilment efficiency.
BLK looks at the track record of company lead times, from order reception to delivery EXW in order to properly quantify “how well” it performs and how quickly it can get orders ready for customers.
3. Production Capacity
Usually in direct correlation with the company size and number of warehouses, the production capacity is a good indicator of the ability to quickly fulfil an order.
High production capacity means likely high levels of stock which, in turn, impacts positively on the lead time and translates into ready availability of the goods.
4. Own Delivery Network
The direct ownership of a fleet of vessels, them being ships, trucks, vans or aeroplanes, generally means direct control over their logistic operations and streamlined decision making. It means ready availability of the vessel, direct control and quicker fulfilment.
Although not applicable for small quantities, where companies often times rely on third-party freight forwarders, the above is true specifically for large volumes.
Having a vessel under direct ownership or bareboat charter means no lag time spent waiting on the owner’s availability, negotiating charter rates, appointing agents etc.
Not only that; direct ownership of a delivery network also means cheaper transport costs and better value for the end customer.
5. After-sales / Customer Service Department
Having a dedicated after sales team and a full time, in-house customer service department directly translates into a more inclusive client journey, better customer care and overall improved experience.
It is massively important to have someone human at the other end of the phone to pick-up enquiries, deliver updates on a shipment and, in general, develop those one to one connections that are essential in the development of any business relationship.
6. Reviews: Customer Service
After every order, buyers on BLK can review n0t only the product, but the seller. In particular, they are asked to assign a star value (from 1 to 5) for various different performance areas, one of these being “Customer Service”.
The overall BLK Rating Score for a supplier is computed, among other things, on the basis of that supplier’s score in relation to Customer Service.
7. Reviews: Communication
Just like Customer Service, buyers can review specifically the “Communication” bit when leaving feedback to a seller.
This mark gets factored into the overall rating and used to paint a comprehensive picture of a company’s Service Delivery performance.
Do you want to get a freeassessment of your company to understand how you position in respect to Quality, Cost, Service Delivery and how you stack-up against your direct competitors?
Welcome to BLK Shipping, our regular update from the shipping market. In this issue, we’ll be covering:
Wet Cargo
Dry Cargo
Containers
Gas
Subscribe to our newsletter to stay up-to-date with our Shipping Weekly and follow us on Facebook and LinkedIn to never miss an update.
Wet Cargo
The increasing price of crude oil has been driving the tankers’ charter rates up throughout July, although this has now slowed down and we are seeing a further downward trend in rates.
VLCC – Very Large Crude Carriers remained pretty much stable. Although we’re still unbelievably far from 2019 levels, we can now see positive signs of pick-up. Outlook: Stable
Suezmax – rates remained still, apart for a few routes where we saw a near 100% growth. As the oil price stabilises, we expect that the vessel charter rates will go with it. Outlook: Stable
Aframax – afra rates more lost ground, with a general weakening across most routes. Outlook: Stable
Dirty Products – Relatively busy in the Mediterranean, whilst supply and demand remaining weak in all other regions. Outlook: Stable.
Clean Products – Charter rates weakened across the board with some routes losing over 70% WoW.. Outlook: Stable
MR – uptake in demand did not have the expected positive effects on MR rates, owing to the oversupply of carrying capacity in the market. Outlook: Stable
LR1 –demand for log-range tankers fell in the last few weeks. Outlook: Stable
LR2 –Good rally for LR2 tankers, up to 20% surge in a week. Outlook: Positive
Handy –Handy earnings bounced back up above $7000/day and it looks like the beginning of a positive performance. Outlook: Stable
Dirty Panamax – Rates continued softening very slightly on all routes, with a general 1% – 5% drop since last week. Outlook: Stable
Dry Cargo
Slow-down on most routes and across all segments, although bulkers remain pretty strong compared to 2019 and 2020 performance.
Capesize – Capes declined between 5 to 20%, having broken through the $40k/day for the first time in years and now travelling on $41k+/day for scrubber-fitted vessels. Outlook: Stable
Panamax – Still another good week for the panamaxes, although slightly in decline compared to the last week of August. Outlook: Stable
Supramax – Supramaxes lost ground in recent days, after climbing steadily over the course of 2021. The second half of August and early September saw a reduction of 4-7% to settle on an average of $35k/day Outlook: Stable
Handysize – the biggest fluctuations happened within the Handy market. Still high after a strong July-August rally, now it fell slightly to $32k+/day mark. Outlook: Stable
Container
Container rates seem unstoppable, with 4400 TEU vessels now nearing the $100k/day mark themselves. Neo-panamax vessels are now close to the $145k/day mark, with a significant impact on the economy of most western countries coming out of the pandemic.
On the raw materials side, however, and especially in chemical commodities, the high freight rates (now looking upwards of $20,000 per TEU on the route China – Europe) now impact prices of goods to the extent that it is equivalent or cheaper to source from European suppliers.
We expect to see a continual decrease in smaller-batches shipments westbound from Asia to Europe, hopefully accompanied by a subsequent easing of the TEU rates towards the end of the year.
Outlook: Positive
Gas
Rates for Gas Carriers remained declined slightly, with the biggest hit suffered by for large carriers 145,000 m3 and above. Pressurized and semi-pressurized vessel rates remained constant.
This was expected as plenty of tonnage was tied-up in dock for ballast water treatment systems installation and is now slowly coming back into the market, increasing overall supply. Outlook: Stable
To learn more about how we can support your business shipping as cheaply and environmentally-friendly as possible, visit us at BLK. Subscribe to our newsletter to stay up-to-date with our weekly shipping updates.
Quality – Cost – Service Delivery are the foundations of our Rating Criteria.
Here’s how we specifically assess “Cost”.
A supplier background check must go beyond the mere credit report, which is readily available for the vast majority of the business anyway and does not give a true reflection on the actual operational profile of a company.
Standard credit reports fall very short of evaluating a business’ quality, its positioning in relation to cost and, most importantly, service delivery.
For this reason, BLK has developed a proprietary evaluation method, currently used as a reference standard within the commodity trading and chemical manufacturing industries and validated on hundreds of clients already.
The BLK Rating, which covers in detail not only financials but Quality, Cost and Service Delivery, with a deep scrutiny on companies’ environmental footprint as well, paints a comprehensive picture of a business’ real position and capabilities.
In this article, we’ll look specifically at how BLK assesses Cost to build the overall company rating.
Cost is a mix of multiple factors. It’s not merely “how expensive (or cheap) is the specific product (or quote)”. It’s about a business’ overall approach to pricing and its positioning in respect to that.
1. Average gross margin
The first item we look at when evaluating cost is the company’ average gross margin in the past 3 years. This gives a good indication on whether the company falls within the average for the industry, above or below, and in which quartile.
An average, constant gross margin in the bottom quartile, means that the company is positioned aggressively in respect to pricing and therefore not only the specific product, but their whole range is likely to be competitive in absolute terms.
2. Price vs platform
It is also important to look at the price of the specific commodity compared to those of other suppliers on BLK.
We pride ourselves of being the “Online Spot Market” and as such we drive strong price competition from vetted suppliers all over the world. A company’s price may be competitive for a specific country but fall short when compared to that of overseas competitors.
We take into account the global landscape, giving buyers a feel of how the supplier stacks up internationally.
3. Average price vs index
To complement that, we also compare the specific price of goods to that of the commodity index (whenever applicable).
This way, we get the full picture, not only via the benchmark with the rest of the private market but with the institutional one as well, comparing the BLK supplier rates’ with those achieved by the movers of huge volumes such as investment banks and blue chip trading houses.
4. Credit Terms
It’s not just about “how much does it cost” but also “how much flexibility do I have for my payment”.
Suppliers that offer credit terms and payments in instalments as opposed to pre-payment only, are ranked higher than those who don’t.
BLK acts with a buyer-centric approach and the easier supplier make for a buyer to purchase, the higher it speaks of their credibility and cost positioning.
5. Price for Specific Order
Finally, we look at the specific quote or price and evaluate it with our team of expert category managers who assign a rating on the basis of their expertise in the international landscape, market conditions and supply-demand knowledge at the specific point in time.
6. Fixed vs Variable Cost Ratio
The ratio between fixed and variable costs for the company gives an indication of how heavy the company’s specific cost base is (in relation to their cost of sales). If the Fixed/Variable costs ratio is relatively low, it underpins a strong dependance from raw materials and possibly a conservative approach to margin.
These are indicators that the company tends to be more competitive than average, and the benchmark with the index and platform average prices for the same commodity, give the full assessment on how aggressive on pricing the supplier actually is.
To find out more on how we assess quality, check out our detailed post.
Do you want to get a freeassessment of your company to understand how you position in respect to Quality, Cost, Service Delivery and how you stack-up against your direct competitors?
Welcome to BLK Shipping Weekly, our Shipping Rates Updates. In this issue, we’ll be covering:
Wet Cargo
Dry Cargo
Containers
Gas
Subscribe to our newsletter to stay up-to-date with our Shipping Weekly and follow us on Facebook and LinkedIn to never miss an update.
Curious of how the shipping rates evolved? Check out our previous article.
Wet Cargo
The increasing price of crude oil has been driving the tankers’ charter rates up throughout July, although this has now slowed down and we are seeing a stabilisation of the tanker rates.
VLCC – Very Large Crude Carriers remained pretty much stable. Although we’re still unbelievably far from 2019 levels, we can now see positive signs of pick-up. Outlook: Stable
Suezmax – rates remained still, apart for a few routes where we saw a near 100% growth. As the oil price stabilises, we expect that the vessel charter rates will go with it. Outlook: Stable
Aframax – afra rates more lost ground, with a general weakening across most routes. Outlook: Stable
Dirty Products – July continued to be busy in the Mediterranean, whilst remained weak in the US Gulf. Outlook: Stable.
Clean Products – Charter rates strengthened across the board primarily driven by the increase of fuel prices and re-opening of most countries in Europe and North America. Outlook: Positive
MR – uptake in demand did not have the expected positive effects on MR rates, owing to the oversupply of carrying capacity in the market. Not huge gains for MRs although a general positive feeling in the market. Outlook: Stable
LR1 –demand for log-range tankers grew significantly. Further climb looks likely as demand for refined products on each side of the Atlantic grows. Outlook: Positive
LR2 –Strong rally for LR2 tankers, up to 160% surge in a week. Outlook: Positive
Handy –Handy earnings slipped below $3000/day as the larger size vessels rallied. Outlook: Stable
Dirty Panamax – Rates continued softening very slightly on all routes, with a general 1% – 5% drop since last week. Outlook: Stable
Dry Cargo
Slow-down on most routes and across all segments, with the exception of handy bulkers.
Capesize – Capes declined between 9 to 15%, having broken through the $30k/day for the first time in years and now finding resistance to a further growth they are now back in the $23k region. Outlook: Stable
Panamax – slight decrease in demand impacted negatively the charter rates, with an average reduction of 10%. Hold availability shortage played a major role, in off-setting a larger fall, with average rates just below $30k. Outlook: Stable
Supramax – Supramaxes lost ground in recent days, after climbing steadily over the course of 2021. The second half of July saw a reduction of 4-7% to settle on an average of $26k/day Outlook: Stable
Handysize – rates continued their upward trend breaking past the $30k/day mark. Outlook: Positive
Container
Container rates did not slow down in July with further increases up to 75% past $100k/day mark for Neo-panamax vessels. As container liners keep stashing cash on the back of the strongest year on record, we are seeing the newbuilding order book starting to fill-up for the year ahead.
We are now seeing more ship owners ordering new tonnage, predominantly ultra-large carriers, LNG fuelled like CMA CGM or methanol-propelled, like Maersk.
More, new carrying capacity is set to enter the market, which should contribute to the softening of the rates. The entrance in service of these vessels is, however, still many months away and demand for containers still looks strong.
On the raw materials side, however, and especially in chemical commodities, the high freight rates (now looking upwards of $18,000 per TEU on the route China – Europe) now impact prices of goods to the extent that it is equivalent or cheaper to source from European suppliers.
We expect to see a continual decrease in smaller-batches shipments westbound from Asia to Europe, hopefully accompanied by a subsequent easing of the TEU rates towards the end of the year.
Outlook: Positive
Gas
Rates for Gas Carriers declined slightly, with the biggest hit suffered by for large carriers 145,000 m3 and above. Pressurized and semi-pressurized vessel rates remained constant.
This was expected as plenty of tonnage was tied-up in dock for ballast water treatment systems installation and is now slowly coming back into the market, increasing overall supply. Outlook: Stable
To learn more about how we can support your business shipping as cheaply and environmentally-friendly as possible, visit us at BLK.
Subscribe to our newsletter to stay up-to-date with our weekly shipping updates.
Learn how to effectively negotiate across cultures, with a specific focus on Asia Pacific.
In this article, we’ll be looking at:
1. Body Language
2. Saying «No»
3. Cultural Differences
4. Trading Variables aka Bargaining Chips
5. How to Successfully Prepare for the Negotiation
6. Buying Tactics
7. Negotiator Rulebook
Here’s a very effective, 30 minute video to learn all you need to know about negotiation, managing relationships with stakeholders in the Asia Pacific Region and always achieve the most successful outcomes from a negotiation.
Negotiation Skills: Managing Supplier Relationships in the APAC Region – BLK Webinar Series
Body Language
93% of communication is non-verbal.
Although we pride ourselves to be rational animals, the vast majority of communication in humans occurs on a subconscious level. What we actually say only counts for a tiny percentage. What really matters is what we do while we say it and how you say it.
This is a hugely important consideration, because it means that, in general, we are disadvantaged in a virtual world.
Now that most meetings have moved online there is no longer that safe space and time outside the boardroom to build a rapport, get to know the other party, get a feeling on their body language. This has strong implications.
No informal space – where trust and connection is established the easiest
Easier to say NO – conversation is less divergent
Lack of physical interaction and coordination – people become more risk averse and conservative
Common mistakes
Let’s look at the common mistakes most people make in a virtual setting.
Avoiding silence – people find virtual silence uncomfortable (silence can be useful)
Not clarifying constraints and assumptions – leads to misunderstanding and lack of trust
Not setting an agenda and managing expectations – surprises are usually not welcome if opposing side is not prepared
Lack of awareness on culture difference – be aware of cultural influence, communication styles, and boundaries
How to successfully negotiate virtually
Connect at the outset and manage expectations
Set the scene by sending the agenda to align on expecations, set up the meeting so you stay in control. Note there is less patience and time to work together
Create informal moments
Ensure everyone has a face and know their background. Use this time to build a connection
Clarify constraints and assumptions
Leave no room for any misunderstanding. Ask more questions and take lead in sharing interests. This helps others reveal more information and gain more trust
Smile
A smile goes a long way to prevent negative facial expressions on screen, and gives the perception that you are more welcoming
“Zoom” fatigue
Meeting fatigues are real, so direct viewers gaze to where they should look, grab audience attention through emotions and movement, and keep meetings short and introduce breaks.
Touch base after the meeting
Send an email or a note summarizing what was discussed/ agreed to ensure everyone is on the same page
Saying “No”
In a face to face negotiation, we must be very mindful of the other party’s cultural background and accept that we may actually stimulate a positive outcome by allowing the other person to say “no.
This is because someone saying “no” feels more protected as well as feeling in need to now give back to the other party. This makes them more open to listen and reach a positive outcome.
Use the “no” to your advantage and prompt a “no” from the other party precisely when you want them to pay more attention to what you have to say next to then drive a positive response.
Face to face negotiation
People are generally more empathetic and more open to finding a common ground, because there is a possibility for more trust and understanding
People are more emotionally alert so tactics such as Mirroring, 3 Yes Rule, and Pacing are more effective
Cultural difference is more prominent, so it is important to be aware cultural differences and knowing how to build the cultural gap
Let’s look at some practical examples of cultural divergences.
Eye contact in UK, US, Europe is a sign of strength, while eastern countries like Japan can be deemed impolite, and middle east as uncomfortable (if working across genders)
Acknowledging hierarchy is a formal rule in Asia. Therefore, where you sit speaks volumes, unlike less hierarchical cultures such as Canada, Sweden, or Britain
Time is important in some cultures, where being late is considered unprofessional, while other cultures like Spanish, Arab, or Nigerians is considered normal
Trading Variables aka Bargaining Chips
Before arriving at the negotiating table, plan in advance everything you want to take away from the other party and every chip you can put on the table in exchange.
Trading variable can be classed according to four macro categories.
Trading Variables in a negotiation
Here are some examples of the main trading variables:
•Price discounts
•Volume discounts
•Total business discount (volume rebates)
•Credit terms
•Payment in instalments
•Extras / add-ons / giveaways
•After sales services
•Specification / quality
•Period over which prices are guaranteed
Preparing for the negotiation
It is good practice to lay down all of your trading variables ahead of the negotiation.
#Rank each variable in order of importance to you (e.g. does it matter more quality, cost, speedy service, etc.)
For each variable, set out a clear range or playing field. What is the best case scenario you aim to take away? What is the worst case, where do you draw the line beyond which you walk away?
Doing this for each and every variable on the table will allow you to be much better prepared and know exactly how much room for compromise you have for every item.
Ask questions. Find out what is the perceived value for each variable from the other party. Always try and give away variables which are low cost to you but perceived as high-value from the other party.
Monetise. How much is each variable worth to the other party? By asking the right question you’ll be able to assign a monetary value to each item. Giving a specific price tag to every variable will help you quantifying how much value you’re adding for your counterpart.
Buying Tactics
Here are some of the most effective buying tactics you can apply.
The Dutch Auction
An open comparison of two or more competitors, often with the competitors sitting in front of one another! This usually translates into a downward auction where each competitor tries to openly undercut the others.
The Budget Bluff
“I really want what you are offering, but this is all I have in my budget so I cannot afford any more…”
The Competitor Quote
“I had more competitive quotes than yours so if you cannot drop your price I will have to go with someone else”
The best friend
Pretending to be friends and leveraging the relationship for a better price.
The future promise
If you give me a really good deal on this first small order I will get you more business in the future.
The Stall
Buyer pretending to be in no rush to find a deal. Remember, in every negotiation one of the parties is always under time pressure. The more the clock ticks, the more they’ll be inclined to making concessions. If the one not having a time constraint is not you… happy days!
Buy Now bargain later
If you are the guy with a time pressure… well this trick may just do for you.
“Given that we have come so far, why don’t you start processing my order and we can sort out the minor details later?”
Negotiator’s Rulebook
Never ever give something away for free. For every variable you concede, get something back from the other party.
When making a concession, ensure it is always a low-cost / high-value variable.
Always act in good faith. Adopt a collaborative approach from the onset. Remember this is business, we’re all in it to achieve a positive outcome. Let’s clarify what is the other party wants to achieve beyond the single transaction. Let us approach the negotiation with (almost) all our cards on the table and let’s invite the other party to do the same. Only then we’ll have visibility of what the other party wants to achieve and we can work together towards a WIN-WIN outcome.
Do you want to learn how to be as effective as possible in purchasing for your business?
Welcome to BLK Shipping Weekly, our update from the shipping market. In this issue, we’ll be covering:
Wet Cargo
Dry Cargo
Containers
Gas
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Wet Cargo
The increasing price of crude oil has been driving the tankers’ charter rates up, with significant boom this week, especially for the Black Sea – Med routes. The barrel price above $75, caused 500%+ surges specifically on the medium-sized parcels.
Tankers Cargo Rates
VLCC – Very Large Crude Carriers rallied 100% WoW, growing with the positive sentiment around oil price. The Spot rates pretty much doubled, from $600/day to $1200/day. Although we’re still unbelievably far from 2019 levels, we can now see positive signs of pick-up. Outlook: Stable
Suezmax – rates boomed, growing on average 30% WoW, with some routes seeing a 5 times increase. As the oil price keeps surging, we expect a positive impact on the vessel charter rates coing forward. Outlook: Positive
Aframax – afra rates more than doubled on the back of the positive oil prices news last week. Current rates fixed above $10600/day. Outlook: Positive
Tankers Charter Rates
Dirty Products – July began with a relatively stable outlook, particularly busy in the Mediterranean, particularly weak in the US Gulf. Outlook: Stable.
Clean Products – Charter rates weakened between 3 to 60% owing to the fact that most world refineries are still operating under capacity due to the low demand for refined fuels. With airlines still down and road traffic at a fraction of the pre-pandemic levels the market remains far from its best shape. Plenty of carrying capacity available on the main routes contributes to weakening the outlook. Outlook: Stable
Product Tankers Cargo Rates
MR – uptake in demand did not have the expected positive effects on MR rate, owing to the oversupply of carrying capacity in the market. Overall down on average 25%, settling at $3800/day.. Outlook: Stable
LR1 –demand for log-range tankers remains low. Slow pick-up is possible depending on the easing of lockdowns and demand for refined products on each side of the Atlantic. Outlook: Stable
LR2 –In general, the market remains down between 3% and 5%. Slightly better than the previous week, although far from 2020 peak performance. Outlook: Stable
Handy –As anticipated last week, with LR and MR tanker rates below those of Handy tankers, charterers have been shifting to larger vessel sizes, wherever possible. This led to a hit in the region of 10% to Handy rates, with an additional slight drop still possible until break even or below is reached. Currently at $3800/day. Outlook: Stable
Dirty Panamax – Rates continued softening slightly on all routes, with a general 15% drop since last week, among fears of a new COVID wave due to the delta variant. Outlook: Stable
Product Tankers Charter Rates
Dry Cargo
General pick-up on all routes and across all segments, underpinning a strong market sentiment, driven by the increasing demand for raw materials.
Bulk Carriers Cargo Rates
Capesize – Capes remained relatively stable, having broken through the $30k/day for the first time in years and now finding resistance to a further growth. Outlook: Stable
Panamax – slight increase in demand impacted positively the charter rates, with another 7% weekly growth. Hold availability shortage played a major role, with charter rates now surpassing $3500/day on certain routes. Outlook: Stable
Supramax – rates climbing steadily over the course of 2021 and stabilised in May to pick-up again more aggressively in June, with a 20% average growth WoW. The first days of July saw a stabilisation of this trend, with a flatter growth curve, rising by an average of 7% WoW to settle on an average of $27k/day Outlook: Positive
Handysize – rates continued their upward trend breaking past the $27k/day mark. Outlook: Positive
Bulk Carriers Charter Rates
Container
Container rates did not slow down starting July with a further 5-6% increase. Now nearing the $100k/day mark for Neo-panamax vessels too. As container liners keep stashing cash on the back of the strongest year on record, we are seeing the newbuilding order book starting to fill-up for the year ahead.
We are now seeing more ship owners ordering new tonnage, predominantly ultra-large carriers, LNG fuelled like CMA CGM or methanol-propelled, like Maersk.
More, new carrying capacity is set to enter the market, which should contribute to the softening of the rates. The entrance in service of these vessels is, however, still many months away and demand for containers still looks strong.
Container Vessels Cargo Rates
On the raw materials side, however, and especially in chemical commodities, the high freight rates (now looking upwards of $15,500 per TEU on the route China – Europe) now impact prices of goods to the extent that it is equivalent or cheaper to source from European suppliers.
We expect to see a continual decrease in smaller-batches shipments westbound from Asia to Europe, hopefully accompanied by a subsequent easing of the TEU rates towards the end of the year.
Air cargo is now cheaper than ocean freight for smaller parcels, are we on the tipping point for this huge container rally?
Outlook: Positive
Container Vessels Charter Rates
Gas
Rates for Gas Carriers remained relatively stable, with a small growth for large carriers. Pressurized and semi-pressurized vessel rates remained constant.
Gas Carriers Cargo Rates
As plenty of tonnage is currently tied-up in dock for ballast water treatment systems installation, we are to expect a softening of the rates next month, as the ships come back into the market. Outlook: Stable
Gas Carriers Charter Rates
To learn more about how we can support your business shipping as cheaply and environmentally-friendly as possible, visit us at BLK.
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An Overview of the World’s First Commodity Marketplace Rapid Growth
BLK MVP launched in September 2019. Let’s take a look at how the marketplace has evolved by analysing its stock and value growth over the past 2 years.
The Humble Beginnings
The second half of 2019 was a game of chicken and egg. Which comes first?
We decided that in order to drive demand on our marketplace, supply had to be there first. This was done with a customer-centric approach. In the B2B space, you often have one shot at fidelising a customer. If you fail they are much less likely to come back.
With this in mind, we got to work to bring in the first 3 suppliers for each category:
Agricultural
Chemicals
Energy
Construction
Main Bulks
Industrial
Metals
BLK Marketplace – Value of commodities in stock over time
Q2 of 2020 was when things started to pick-up. We agreed strategic partnerships with UK and India-based producers of semi-finished metal products, then onboarded the first chemical suppliers.
In December 2020 our big breakthrough: our first transaction. We are now post-revenue.
From the beginning of 2021, with the birth of our Supply Chain division, we targeted SMEs and large corporate businesses, some of which are blue-chip, publicly-listed entities.
We have now shifted gears, driving supply onto the marketplace thanks to the increased demand.
The strategy is to sign large buyers on, let them bring in their own suppliers, to get cash-back on their orders. We share the profits we earn with them and the growth becomes exponential.
Between Q1 and Q2 2021 we grow 265%, with an average annual compound growth rate of 277.8% and an overall growth of 3225% between 2019 and 2021.
Underlying Commodity Asset Value Distribution by Category
BLK Marketplace – Commodities value distribution by category
To date, suppliers on our marketplace trade $332M-worth of chemical commodities (31% of the total value of goods for sale on BLK); $242M of metal products (including grade A steel, stainless steel and high-strength alloys); $238M of Agricultural goods (22% of the total) and $219M of energy products (20% of the total).
BLK Marketplace – Commodities distribution by quantity
Metals account for the vast majority of the overall quantity in sheer weight – nearly 1 million tons.
In second place come construction materials, with one supplier stacking a whopping 220,000+ tons of aggregates, cement, construction sand and bentonite, the main component of the clay used to fabricate bricks, fuelling the booming housing market in the UK and Europe.
Main Bulks, which cover fly ash, sand and lower-value commodities, together with Industrial products (mainly lubricants and specialised chemicals) account for a 4% of the overall stock value traded on BLK, with an overall 16% in terms of sheer volume contribution. The reason for this is that these are generally high-volume, low-value commodities.
Outlook
As we move forward into the second half of 2021 and further into 2022, we will continue seeing a significant and steady growth in our marketplace activity.
With a few deals under negotiation, our short-term pipeline already holds a further half-million tons of energy products, which will account for an additional $300M in stock value in the next 3-6 months.
Contacts & Additional Info
For additional information on our growth, projections and performance, contact our investor relations at info@blk-global.com
or Gabriele Dadò – Founder & CEO, at gabriele.dado@blk-global.com
To learn more about BLK, our proprietary Rating system and how we assess quality, ensuring security on all transactions and differentiating from all vertical-focused marketplaces, check out our LinkedIn page or see our blog.
