The dry bulk freight market is on the cusp of greater price transparency, argues one of the key movers and shakers in the sector, BHP Billiton. The giant miner shocked the shipbroking community earlier this year when it unveiled an online auctioning system for owners to bid directly with BHP for charter contracts.
Rashpal Bhatti, BHP’s vice president for freight, argues that this is the first of plenty of online initiatives set to transform the dry bulk trades.
Writing on BHP’s site, Bhatti noted: “E-auctions drive productivity through process efficiency and cost reductions for ourselves and our vendors, which can only build stronger partnerships over time.”
Bhatti said that only shipowners with excellent track records on environmental and safety criteria pass the necessary vetting process to participate in the company’s online auctions.
“We are strong advocates of efficiency and transparency in markets,” Bhatti wrote, adding: “We feel the dry bulk freight market is on the verge of a transition similar to one seen in bulk commodities markets over the last decade.”
BHP helped lead the bulk commodities industry in the move towards indexation, higher liquidity and price transparency.
“Our eAuction application is the first step towards bringing a broader change in mind-set amongst industry participants to embrace technology,” Bhatti concluded.