Continuing effort to cut down on cost and improve profitability for bulk carriers
With BDI sharply falling through recent years of economic depression, global shipping business is involved in cut-throat competition for survival. With both demand and supply in shambles, we cannot expect BDI to rise quickly. For the second half of the year, however, we have some positive prospects for a gentle recovery in bulk carrier market. So, it is now up to bulk carriers to not fall behind this trend and respond nimbly.
Surviving tough times places a high priority on securing cost competitiveness. Hence, bulk shipping companies have sought ways to cut down on costs and enhance profitability. Then, what should we do to maintain profit margins while reducing costs and risks?
1. Linkage with diverse information for cost reduction
The most efficient cost reduction method should be not generating unnecessary costs. If we take full advantage of the specialized technical data such as port distance table from Netpas and weather information from Weather news and apply it to management of ship navigation, we can predict actual costs and calculate optimized sea routes. With this prediction, we can reduce sailing distance and prevent wasting fuel to help cut down on a shipping company’s cost. Also, with regard to bulk shipping, a comparative look at regional prices for fuel and port expenses would help reduce costs.
2. Automation and process organization
Automation reduces the burden of manual work for the employees of shipping companies and enhances work efficiency. It directly links to the system various reports coming from the vessel, thus making possible an efficient and accurate management of navigation records. Especially if we get away from work relying on manually handled Excel files and create database for various data, it can not only ensure operational continuity among employees, but also easily incorporate desired data into reports or reduce time for account settlement.
3. Upgrading balance management
Based on data obtained through automation, information at the beginning, at the completion of shipment, and at the final stage should be compared to analyze causes of changes in profitability. With such analytical data, a shipping company can manage balance for different voyage numbers, vessels, or customers, and contract history, which can upgrade business competitiveness for a bulk carrier.
As an IT company specializing in shipping, port, and logistics and from years’ experience, CyberLogitec clearly understands the problems facing the shipping and logistics industry and possesses various solutions that could improve work efficiency for related companies.
Among others, the software solution for bulk shipping companies boasts the following features.
- Performance management as against a plan through management of project-specific plans
- Analysis of closed deals and implementation of contracts
- Maximized use of data through linkage among navigation, performance, and analytical data from specifics of profitability review
- Voyage phase-specific analysis from initial profitability, completion of shipment, and completion of a voyage number
- Invoice management and automatic accounting fit for business characteristics
- Effective interface with other accounting systems
Have something to say about profitability issue in bulk shipping? or Do you like to know more about our solutions? Leave a comment below. We’ll get back to you as soon as we can.
Posted by Seung-Hee Seo, a Business strategist, who has made business plans and researched the maritime industry including container and bulk shipping.