Berge Bulk founder and chief executive James Marshall was excited when he took to the podium at a Marine Money conference in Singapore on Tuesday.

Capesize rates, he gleefully told the audience, had just smashed the $56,000-per-day mark.

Marshall — who gave a rare glimpse into his low-profile but giant dry bulk company during a 30-minute on-stage interview conducted by DNB Markets Singapore managing director Joachim Skorge — said he had every reason to believe that the sector would continue on a high for the next two years.

“Some of the seeds for this current high cycle are set to continue for some time,” Marshall said.

Strong demand from the Covid-19 rebound together with strong coal and steel prices were some of the reasons he cited.

Marshall also pointed out that 30m more tonnes of iron ore were brought into the market, most of which was long-haul from Brazil.

Already describing the market as being very healthy, he said it has been “supercharged” by Covid-19 issues.

He said constraints such as strains on logistics and the efficiency of the fleet have “added spiciness to the market”.

The shipowner cautioned that these pandemic factors would only have a short-term effect on what he described as an “already strong market”.

“The short to mid-term prospects look pretty positive,” he said. “We will still see strong demand over the next two years.”

Factors influencing Marshall’s bullish market view include the US infrastructure package and strong demand for electricity in India, along with low stockpiles of coal in both India and China.

“The road to decarbonisation and renewables will also be infrastructure intensive,” he said.

In addition, Marshall noted that Vale intends to up its iron ore production capacity to 375m tonnes in 2022, which should add an extra 30m to 35m tonnes to the seagoing iron ore trades.

This, he added, was combined with a modest orderbook for new tonnage, which is unlikely to change as building slots at shipyards are occupied by containership orders.

Success story

The capesize Berge Neblina is one of 85 bulkers owned by Singapore-based Berge Bulk. Photo: Berge Bulk

Berge Bulk is seen by some as one of dry bulk’s greatest success stories from the past decade.

Marshall founded the company in 2007, when he bought 12 capesize bulkers from BW Group.

Today, the company owns a fleet of 85 bulkers, the vast majority of which are capesizes. In the smaller size segments are seven ultramax and 16 handysize bulkers.

Another capesize is set to join the fleet later this month, while a newbuilding is scheduled for delivery in 2022. When both have been incorporated into the fleet, the company will have a total capacity of 14.7m dwt.

Asked to divulge the secret of his success, Marshall said it came down to having a good business model, the right management team and strong support from banks.

“I wanted to build a business offering safe, efficient and reliable freight, and we’ve stuck to that,” he said. “Delivering what we said we would do has helped with banks.”

Being cautious, financially prudent and taking only well-considered risks were also listed as factors that played out in Berge Bulk’s favour.

Asked whether now would be the right time to invest in new ships, Marshall said an area where Berge Bulk is considering making further investments is the smaller bulker size sectors, which he said were performing well because of strong grain demand and have positive market fundamentals going forward.

However, Marshall stressed that the company’s growth emphasis over the next few years would be on decarbonisation rather than adding large numbers of new ships.

“We bought 10 ships at the low point of the cycle and are currently absorbing them,” he said.

Berge Bulk has committed itself to having a zero-carbon vessel in service by 2030.

Marshall said that while the company worked on that goal, it continued in the interim to invest in improving the efficiency of its existing ships, improving their performance and reducing their carbon emissions using existing technologies, ranging from better paints to improved voyage performance systems.

This upgrading is an ongoing process that Marshall said has resulted in a 42% reduction in the Berge Bulk fleet's carbon intensity as compared to what it was in 2008.