Dry Bulk Shipping: Boom, Bust, and the Brutality in Between
They move the raw bones of civilisation—iron, coal, grain, bauxite. But the market that carries them runs on madness, not logic.
July 22, 2025
I. Old World, Savage Cycles
Dry bulk shipping doesn’t trend. It convulses.
One year, it’s the belle of the ball—Baltic Dry Index (BDI) hitting 5,000, rates surging, pundits screaming “supercycle.”
Next year? Fire sales, rusting ships, bankrupt CEOs.
No sector reminds us faster that the economy is physical—but investor belief is psychological.
While tech seduces with clean margins and smooth multiples, dry bulk is a mud fight. You bet on it when everyone else walks away. And right now, the crowd is looking bored or scared. That’s when it gets interesting.
II. Herds Don’t Think, They Stampede
Dry bulk is the lovechild of mass psychology and cold steel.
Forget EBITDA projections. Forget regulatory white papers.
What drives this market is mood—ravenous, euphoric, or terrified.
- BDI spikes? CNBC finds a Greek shipowner to say it’s the “new oil.”
- Rates collapse? Analysts panic over China’s GDP miss and suddenly claim “overcapacity is structural.”
It’s all noise. The crowd is rarely rational. It’s Jung’s collective unconscious riding a volatility chart.
🧠 Carl Jung once said: “The greater the tension, the greater the potential.”
In shipping, tension is everywhere—between demand and fleet size, sentiment and data, price and value.
When the crowd celebrates, brace for the fall.
When they flee, lean in—slowly, carefully, but without apology.
III. Sentiment as a Vector
We don’t measure sentiment in headlines. We measure it in rate-of-change.
If the mood jumps from “apathetic” to “mildly interested,” that’s more meaningful than “bullish to euphoric.”
The best contrarian entries happen not when things are good, but when they suddenly stop getting worse.
Case in point:
- Late 2020: Freight rates spiked after years of stagnation. Most funds ignored it.
- Early 2021: BDI explodes. Suddenly, everyone is long dry bulk. Too late.
- 2022–2023: Inflation rips, global trade shifts, and shipping tanks. That’s the setup again.
⚠️ Howard Marks reminds: “You can’t do the same thing others do and expect to outperform.”
Dry bulk is a blood sport. You outperform by being early, lonely—and right.
IV. Cognitive Distortions: Investors Lie to Themselves
Forget macro forecasts. What kills your returns are the lies you whisper to yourself.
- Recency bias: “Rates were weak for three months—this sector is dead.” Wrong. That’s often the bottom.
- Anchoring: “It was $2,000/day last quarter, so it must return.” Wrong again. The market doesn’t care about your mental anchors.
- Loss aversion: You hold a loser, praying it rebounds. But in dry bulk, sometimes the ship sinks—literally.
The key? Stop trying to be right. Start trying to be aware.
If your ego needs vindication, this is not the sector for you. This is the jungle, and only those who adapt survive.
V. Technically Ugly—But That’s the Tell
Dry bulk stocks don’t break out clean. The gap. They fake. They bleed sideways.
But technicals still whisper secrets:
- Price bouncing off long-term support with rising volume? Smart money is positioning.
- RSI scraping bottom while BDI ticks up? Hidden momentum under despair.
- Violent rejection of 200-day MA with no fundamental shift? Emotion, not value, driving action.
The signals don’t guarantee profit. But they map the crowd’s mental breakdown.
That’s where your edge lives.
VI. The Lie of Sustainability (And the Truth Beneath It)
IMO caps. ESG funds. Carbon taxes. It all sounds clean.
But here’s the dirty truth: most of it’s theatre.
The real sustainability play isn’t branding—it’s fleet efficiency and timing.
- Companies that retrofit in downturns? Kill during upswings.
- Those who overspend chasing green points when rates collapse? Dead weight.
🧠 Thorstein Veblen would call most ESG shipping upgrades “conspicuous compliance.”
What matters isn’t press releases. It’s who can load more cargo, burn less fuel, and still get chartered when rates implode.
VII. Chaos Breeds Opportunity
Dry bulk isn’t dying. It’s mutating.
- China slows? India ramps.
- Coal fades? Bauxite rises.
- Panama congested? Cape routes spike.
Geopolitics reroute shipping faster than analysts can update spreadsheets.
Every trade war, drought, port strike, or energy embargo reshapes tonnage flows.
You’re not investing in calm seas.
You’re betting on your ability to think across vectors: macro, mood, regulation, tech, and time.
VIII. What Actually Matters Now
Here’s what cuts through the noise:
- Debt-to-equity: Too high = death in downturns.
- Cash flow: Smooth across quarters = operational skill.
- TCE vs. peers: Are they sweating the same route but earning more? That’s management alpha.
- Fleet age: Older = cheaper upfront, expensive later.
- Order book size: An oversupplied fleet crushes margins. Watch the global newbuild pipeline like a hawk.
Forget P/E ratios. This is a knife fight. Balance sheet and fleet profile win wars.
IX. Strategy, Not Story
So—buy now or bail?
Wrong question.
This market isn’t a binary bet. It’s a vector strategy:
- Start small if rates are bleeding but macro shifts look bullish.
- Scale only when BDI starts turning up while sentiment stays dead.
- Exit quickly if the crowd comes in too hard and too fast.
You’re not investing in bulk shipping.
You’re investing in emotional asymmetry—a hated, volatile sector that the crowd can’t stomach, but which might pay 3x if your timing clicks.
X. Final Word: Buy Panic, Sell Consensus
Dry bulk won’t reward the naive. It punishes hesitation, ego, and romanticism.
When it’s hated, it’s hunting season.
When it’s praised, it’s time to run.
Forget predictions. Track pressure points—map sentiment.
Don’t ask if it’s time to buy. Ask if the crowd has mispriced the future.
If they have—and you’re bold, liquid, and unshaken—
Then this sector won’t just return.
It’ll explode.
