Eagle Bulk Shipping Inc. is a U.S.-based, fully integrated shipowner-operator, providing global transportation solutions to a diverse group of customers, including miners, producers, traders and end users.
The company focuses exclusively on the versatile midsize drybulk vessel segment and owns one of the largest fleets of Supramax/Ultramax vessels in the world. The company performs all management services in-house (strategic, commercial, operational, technical, and administrative) and employs a...
Eagle Bulk Shipping Inc. is a U.S.-based, fully integrated shipowner-operator, providing global transportation solutions to a diverse group of customers, including miners, producers, traders and end users.
The company focuses exclusively on the versatile midsize drybulk vessel segment and owns one of the largest fleets of Supramax/Ultramax vessels in the world. The company performs all management services in-house (strategic, commercial, operational, technical, and administrative) and employs an active management approach to fleet trading with the objective of optimizing revenue performance and maximizing earnings on a risk-managed basis. Typical cargoes the company transports include both major bulk cargoes, such as iron ore, coal and grain and minor bulk cargoes, such as fertilizer, steel products, petcoke and cement.
As of December 31, 2023, the company owned and operated a modern fleet of 52 Supramax/Ultramax vessels, with an aggregate carrying capacity of 3.16 million deadweight ton ('dwt') and an average age of 10 years.
In addition to its owned fleet, the company charters-in third party vessels on both a short-term and long-term basis. As of December 31, 2023, the company had three Ultramax vessels on a long-term charter-in basis, each with a remaining minimum lease term of less than one year.
Business Strategy
The company's business strategies are to focus on the most versatile drybulk vessel segment; employ an active management strategy for fleet trading; execute on fleet renewal and growth; perform technical management in-house; and emphasize Environmental, Social and Governance ('ESG') factors.
Commercial Strategies
The following is a brief description of the commercial strategies the company uses to employ its vessels:
Time Charter-Out
Time charter-out describes a contract for the use of a ship for an agreed period of time, at an agreed hire rate per day. Commercial control of the vessel becomes the responsibility of the time charterer who performs the voyage(s). The time charterer is responsible to pay the agreed hire and also purchase the fuel and pay port expenses. Time charters can range from as short as one voyage (approximately 20-40 days) to multiple years.
Voyage Chartering
Voyage chartering involves the employment of a vessel between designated ports for the duration of the voyage only. Freight is earned on the volume of cargo carried. In contrast to the Time charter-out method, in a voyage charter, the company maintains control of the commercial operation and are responsible for managing the voyage, including vessel scheduling and routing, as well as any related costs, such as fuel, port expenses and other expenses. Having the ability to control and manage the voyage, the company is able to generate increased margin through operational efficiencies, business intelligence and scale. Additionally, contracting to carry cargoes on voyage terms often gives the company the ability to utilize a wide range of vessels to perform the contract (as long as the vessel meets the contractual parameters), thereby giving significant operational flexibility to the fleet. Such vessels include not only ships the company owns, but also third-party ships, which can be chartered-in on an opportunistic basis (the inverse of a Time charter-out strategy).
Vessel + Cargo Arbitrage
With this strategy, the company contracts to carry a cargo on voyage terms (as described above under the caption 'Voyage Chartering') with a specific ship earmarked to cover the commitment. As the date of cargo loading approaches, the market may have moved in such a way whereby the company elects to substitute a different vessel to perform the voyage, while assigning a different piece of business to the original earmarked ship. Taken as a whole, this strategy can generate increased revenues, on a risk-managed basis, as compared to the original cargo-vessel pairing.
Time Charter-In
This strategy involves the company leasing a vessel from a third-party shipowner at a set U.S. dollar per day rate. As referenced above, vessels can be time-chartered in order to cover existing cargo commitments, resulting in a Vessel + Cargo arbitrage. These ships may be chartered-in for periods longer than required for the initial cargo or arbitrage, and can also be chartered-in opportunistically in order to benefit from rate dislocations and to obtain risk-managed exposure to the market overall.
Hedging (FFAs)
Forward Freight Agreements ('FFAs') are cleared financial instruments, which the company can use to hedge market freight rate exposure by locking in a fixed rate against the eventual forward market. FFAs are an important tool to manage market risk associated with chartering-in of third-party vessels. FFAs can also be used to lock in revenue streams on owned vessels or against forward cargo commitments the company may enter into.
Asymmetric Optionality
This is a blended strategy approach whereby the company utilizes time charters, cargo commitments and FFAs together to hedge away market exposure while maintaining upside optionality to positive market volatility. As a simplified example, a ship may be time chartered-in for one year with a further optional year. In such a scenario, and dependent on market conditions, the company could sell an FFA for the firm 1-year period commitment, essentially eliminating exposure to the market, while maintaining full upside on rate developments for the optional year.
Customers
The company's customers include some of the world's leading agricultural, mining, manufacturing and trading companies, as well as smaller, privately owned companies.
Operations
The company carries out the commercial, technical and strategic management of its fleet through the company's wholly-owned subsidiary, Eagle Bulk Management LLC. The company also maintains offices in Copenhagen (Denmark) and Singapore.
The two central aspects to the operation of the company's fleet include:
Commercial operations, which involve chartering and operating a vessel; and
Technical operations, which involve maintaining, crewing and repairing a vessel.
Each of the company's vessels serve the same type of customer, have similar operation and maintenance requirements, operate in the same regulatory environment, and are subject to similar economic characteristics. Based on this, the company has determined that it operates in one reportable segment which is engaged in the ocean transportation of drybulk cargoes worldwide through the ownership and operation of drybulk vessels.
Commercial Management
The company performs the commercial management of its fleet, including obtaining employment for the company's vessels and maintaining relationships with the charterers of the company's vessels. The company has three offices across the globe located in the U.S., Europe and Asia, which allows for 24-hour market coverage.
Technical Management
The company has established in-house technical management capabilities, through which the company provides technical management services to all vessels in the company's fleet. Technical management includes managing day-to-day operation of the vessel and machinery; performing general maintenance; ensuring regulatory and classification society compliance; supervising the general efficiency of the vessel; arranging the hire of qualified officers and crew; planning, arranging and supervising drydocking and repairs; purchasing supplies, spare parts, lubes and new equipment; and appointing supervisors and technical consultants.
Environmental and Other Regulations
The IMO, the United Nations body for maritime safety and the prevention of pollution by ships, has adopted the International Convention for the Prevention of Pollution from Ships, 1973, as modified by the Protocol of 1978 relating thereto, collectively referred to as MARPOL 73/78 ('MARPOL'). MARPOL has been in effect since October 2, 1983 and has been adopted by over 150 nations, including many of the jurisdictions in which the company's vessels operate.
The company implemented a comprehensive approach to comply with IMO sulfur regulations by fitting scrubbers on the majority of the company's fleet. The company is in compliance with all current requirements of Annex VI, but the company may incur additional costs to comply with more stringent standards.
The operation of the company's ships is also affected by Chapter IX of SOLAS, which sets forth the IMO's International Management Code for the Safe Operation of Ships and Pollution Prevention (the 'ISM Code'). The company relies upon the SMS that the company has developed for compliance with the ISM Code.
The company's in-house technical managers have obtained DoC for all offices and safety management certificates for all of the company's vessels for which the certificates are required by the IMO, which certificates are renewed as needed.
The company has obtained Anti-Fouling System Certificates for all of the company's owned vessels that are subject to the Anti-Fouling Convention.
Both the United States Oil Pollution Act of 1990 (as amended) and the Comprehensive Environmental Response, Compensation and Liability Act impact the company's operations.
The company has complied with the regulations by providing a certificate of financial responsibility from third party entities that are acceptable to the U.S. Coast Guard (USCG).
The company's operations occasionally generate and require the transportation, treatment and disposal of both hazardous and non-hazardous solid wastes that are subject to the requirements of the U.S. Resource Conservation and Recovery Act ('RCRA,') or comparable state, local or foreign requirements.
The company has implemented each of the relevant security measures addressed by the Maritime Transportation Security Act of 2002; the International Convention for the Safety of Life at Sea 1974, as amended, adopted under the auspices of the IMO (SOLAS); and the International Ship and Port Facilities Security Code (ISPS Code).
The company's business operations in countries outside the United States are subject to a number of laws and regulations, including restrictions imposed by the U.S. Foreign Corrupt Practices Act (FCPA), as well as economic sanctions and trade embargoes administered by Office of Foreign Assets Control ('OFAC'). The FCPA prohibits bribery of foreign officials and requires the company to keep books and records that accurately and fairly reflect the company's transactions.
History
Eagle Bulk Shipping Inc. was founded in 2005. The company was incorporated in 2005 under the laws of the Republic of the Marshall Islands.
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