Bulk cargo

• 1. Introduction

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  Bulk cargo moves the world's most essential raw materials without a box, a bag, or a wrapper in sight. Petroleum flows into tanker holds. Grain pours through spouts into waiting ships. Coal tips from conveyor belts into railway wagons. What connects all of these is a single principle: transport the material itself, in volume, without packaging.

  The question that follows is not just logistical. It is economic. How do you measure the cost of moving so much weight across so many oceans? And how does the answer become a signal that traders and governments use to read the health of the entire global economy?

• 2. Wet and Dry

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  Bulk cargo splits into two broad categories, and the line between them is exactly what it sounds like. Dry bulk covers any solid material carried in mass: bauxite, coal, grain, iron ore, wood chips, cement, fertilizer, and dozens of others. These are dropped or shoveled into holds, loose and unbound.

  Wet bulk is anything pumped or poured into closed tanks. Petroleum, gasoline, liquefied natural gas, liquid nitrogen, fruit juices, cooking oil, rubber, vegetable oil, and hazardous chemicals in liquid form all travel this way. The carrying vessel is sealed around the cargo rather than open to it.

  Not every shipment fits neatly into one of these categories. Smaller quantities of material that would otherwise travel in bulk can instead be boxed or drummed and placed on pallets. That packaged form has its own name: breakbulk cargo, a distinction that matters when cargo is sorted, insured, and priced at port.

• 3. The Baltic Exchange

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  Based in London, the Baltic Exchange sits at the center of the global bulk shipping market. It publishes a range of indices that benchmark the cost of moving dry and wet bulk commodities along popular sea routes around the world.

  Some of those indices are used to settle Freight Futures, known as FFAs. The most widely watched is the Baltic Dry Index, commonly called the BDI. It is a derived function of four sub-indices: the Baltic Capesize Index, the Baltic Panamax Index, the Baltic Supramax Index, and the Baltic Handysize Index. Each of those names refers to a class of vessel by size.

  The BDI has earned a reputation as a bellwether for the global economy. Because it tracks the movement of raw commodities before they are processed or manufactured, it can reflect an increase or decrease in what countries are importing and exporting. A rising BDI suggests demand for raw materials is climbing. A falling BDI can point in the opposite direction, making the index a signal that runs ahead of much of the economic data that follows.

• 4. Ports of Scale

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  Not every port can handle the volumes that bulk cargo demands. The ships are enormous, the materials are heavy, and the infrastructure required to load and unload them is specialized. A handful of ports around the world have built that capacity at scale.

  The Port of Rotterdam in the Netherlands is among the most significant. The Port of Port Hedland in Australia handles vast quantities of iron ore. Vancouver, Liverpool, Tyne, Amsterdam, and Hamilton in Canada each serve major bulk trade routes. These ports are not general-purpose facilities. They are engineered around the particular demands of moving commodities in mass, efficiently, and continuously.