Trafigura Maritime Logistics arranges shipping and freight services for Trafigura’s commodity trading teams and for third-party clients. It operates as a service provider, securing competitive and reliable freight for in-house oil, metals and minerals traders. The Wet and Dry Freight desks also function as profit centres in their own right.

2020 Wet and Dry Freight activity
Number of fixtures1
(2019: 3,001)
(2019: 1,172)
Average number of vessels under time-charter2
(2019: 100-120)
(2019: 45-50)


  1. Approximately 70% of our wet cargo programme is on third-party owned ships
  2. A vessel on hire for more than three months (excludes gas carriers)

Wet freight

The last 12 months may well be recorded as the most volatile year in the tanker industry’s history. We witnessed the attack on the Abqaiq terminal in Saudi Arabia, US sanctions against the Chinese shipping company Cosco's fleet, and COVID-19 and accompanying sharp moves in oil prices, culminating in a crisis over tanker crew changes. For tanker owners, this created unprecedented volatilty, with super-contango in the oil market pushing tanker earnings to an all-time high throughout calendar Q2 and down again to operating expense levels by end of the third quarter.

The Trafigura wet freight team delivered a robust performance and increased profitability compared to 2019, making this our best year on record. At the start of the financial year, we were expecting significant fuel price disruption because of the incoming IMO 2020 sulphur cap regulations, as well as stronger market fundamentals due to the continuing increase in US exports and an ageing tanker fleet profile. This led the team to build a long freight position across all segments with a blend of shorter and longer period deals. Owing to the optionality and length within our freight book, we were able to respond effectively to the exceptional events that took place throughout the year. Over the course of the year, our fleet increased by almost 70 percent; at the peak, we controlled more than 220 owned and time-chartered vessels (excluding LNG carriers). Cargo volumes increased marginally compared to 2019.

One of the biggest challenges faced was to operate a large fleet with more than 80 percent of the team working from home due to COVID-19 related lockdowns. Furthermore, the crew change crisis – with thousands of seafarers from across the globe stranded on ships, continuing to work but unable to be relieved – added a new layer of complications and difficult conditions for crews. On Trafigura-owned and bareboat vessels, we implemented an additional hardship payment for crewmembers who, due to COVID-19 regulations, had to spend overtime onboard. We consider the maritime crews as the unsung heroes of 2020, and it is very much thanks to their hard work and perseverance that global oil trade continued to function throughout this challenging period.

We are currently witnessing a rapidly changing industry with more oil and trading companies coming into the market, willing to pay considerable premiums to access timecharters. The increase in bidding activity is pricing timecharter rates to levels in excess of spot and forward freight market curves. With companies seeking to cover more and more of their cargo base via internal time-charters, the number of available cargoes in the spot market is expected to be reduced, thus resulting in a drop in earnings.

We believe that the fundamentals for the next six to 12 months are not encouraging, mainly as a result of demand destruction for oil and continued OPEC+ production cuts. Furthermore, we anticipate that more tankers will come out of floating storage, putting more pressure on the supply side. We expect to redeliver more than half of our current time-chartered fleet by the end of 2020 calendar year. We also anticipate becoming more active in the spot market, which we believe will offer a cheaper solution to ship our cargoes. A priority for next year is to continue improving the ways we manage and reduce CO2 emissions.

Dry freight

The dry freight market in 2020 was defined by two significant events: IMO 2020 and COVID-19. IMO 2020 regulations caused some initial disruption, with fuel prices rising steeply from November to January. However, prices levelled sooner than had been anticipated. The COVID-19 pandemic, on the other hand, had a significant impact on the market as cargo volumes dropped sharply and disrupted traditional trade patterns.

Thermal coal trades experienced the greatest impact. Annual volumes declined by over 100 million metric tonnes year-on-year through demand destruction and subsequent mine closures. However this drastic loss of cargo was partly offset by record soya bean volumes flowing from Brazil to China.

While cargo volumes dropped globally, inefficient trading through increased ballasting, crew change delays and record congestion in China maintained vessel demand and offset the full impact.

In terms of prices, volatility remained a key characteristic of the market throughout the year, as was witnessed with the Cape market starting the financial year at USD24,402 per day, falling to a low of USD1,992 in May and subsequently climbing to a high of USD33,760 in July. The last three months of the financial year saw a broad recovery in the dry freight complex.

Trafigura’s dry freight volumes and fixtures, unsurprisingly, fell year-on-year. However, profit increased by nine percent, yielding a record year for the desk in what were chaotic market circumstances. Apart from the difficulties created by the disruption to normal working practices, both to ours and our counterparties, the biggest challenges were uncertainty over national regulations relating to COVID-19 and the immense hardship experienced by seafarers who could not leave vessels because of travel restrictions.

In the next 12 months, we expect the market balance to depend heavily on how the coal market evolves. Freight rates and volumes are certain to be volatile, and while the overall freight market is likely to remain depressed, continued inefficient trading of the fleet will cause temporary spikes in demand. Our focus will be on increasing cargo volumes while further improving our operational efficiency and how we measure, report and reduce CO2 emissions produced through our activities. For further details on our sustainable shipping initiatives, see our 2020 Responsibility Report.


Andrea Olivi

Head of Wet Freight Shipping

Alan Cumming

Head of Dry Freight Shipping

2020 Annual Report
2020 Annual Report

2020 Annual Report

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