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The Freight Equation: How Ultramax & Handysize Markets Are Reshaping Globally

By Iakovos (Jack) Archontakis

Senior Maritime Strategy Consultant - Chartering Executive & TMC Shipping  Commercial Director

The global Ultramax and Handysize dry cargo markets moved through the week with a noticeably firmer undertone across several key basins, although the recovery remained uneven and highly regional in character. While certain Atlantic routes accelerated sharply on tightening tonnage and resilient grain demand, other sectors continued to wrestle with oversupply, muted enquiry and cautious chartering activity. Beneath the surface, however, a broader pattern is beginning to emerge: vessel positioning is once again becoming a decisive market driver, and the competition for prompt tonnage in strategically important regions is gradually reshaping freight dynamics worldwide.

In the South Atlantic, the Ultramax segment gathered significant momentum as confidence around end-May loading dates strengthened throughout the week. Larger Ultramax units remained the principal beneficiaries of the ongoing Panamax grain programme, continuing to outperform smaller ships within the segment. Although smaller Ultramaxes also recorded gains, the pace of improvement remained more measured.

Owners sensed the changing mood early and responded accordingly, steadily increasing freight expectations across the board. At the same time, additional forward-positioned tonnage was drawn into East Coast South America, where improving cargo prospects continued to absorb vessel supply. West Africa, by contrast, offered little in the way of excitement. Conditions there remained broadly static, with softer demand failing to produce any meaningful shift in rates or sentiment.

The Handysize market in the South Atlantic presented a very different picture. Prompt positions remained heavily burdened by excess tonnage arriving from West Coast South America, North Coast South America, the West Mediterranean and the traditional West Africa ballast flow. This accumulation of open vessels continued exerting downward pressure on nearby employment opportunities.

Spot enquiry remained relatively thin through end May, although market participants began to observe a healthier emergence of cargoes for very late May and early June dates. While prompt business still appears vulnerable to additional correction given the current vessel surplus, owners and operators are increasingly focused on the early June window, where stronger demand could begin restoring balance. Much will depend on the number of vessels rolling forward into that same period and whether ongoing Mediterranean weakness triggers further ballast pressure into the South Atlantic basin.

Across the United States Gulf, the Ultramax market evolved into an increasingly positional environment. The week initially opened under softer conditions, with freight indications easing across several major routes. Yet sentiment shifted abruptly as the days progressed, driven by a growing shortage of owners willing to commit vessels towards the East Mediterranean.

That tightening imbalance transformed the East Mediterranean transatlantic trade almost overnight. Ultramaxes were soon commanding well above USD 30,000 per day, while some owners pushed even further by demanding Otranto redelivery terms, highlighting the scarcity of available tonnage within the East Mediterranean itself.

At the same time, sustained strength in East Coast South America continued drawing vessels away from both North Coast South America and Caribbean positions. The late-season grain surge from East Coast South America further compounded the tightening effect by discouraging Atlantic tonnage from repositioning back towards the US Gulf.

Fronthaul business remained comparatively stable, with Ultramaxes generally fixing around the mid-USD 20,000-per-day range depending on specifications. Although the Ascension Day holiday across much of Europe was expected to slow activity towards week’s end, market confidence for June remained notably optimistic. Mid-June transatlantic voyages were reportedly fixing near USD 28,000 on Ultramax units, while July indications had already begun moving into the USD 30,000 range. The broader expectation is that Atlantic fundamentals should remain supportive throughout the summer season.

The Handysize sector in the US Gulf experienced a busier opening to the week, largely fuelled by pre-holiday fixing activity linked to Geneva and Copenhagen. Despite the increased pace of business, freight levels themselves remained largely unchanged.

Transatlantic voyages, Inter-Caribbean business and West Coast routes continued trading within the mid-to-low teens, reflecting a market still fundamentally balanced. Most participants viewed the temporary burst of activity as calendar-driven rather than evidence of any substantial structural shift. Looking ahead, June fronthaul cargoes are expected to emerge more actively, although prevailing expectations still point towards broadly flat conditions in the near term.

Further south along the Pacific coast, the West Coast South America Ultramax market strengthened once again. Firmer North Pacific demand and improving first-half June fronthaul enquiry combined to support higher levels throughout the week.

A growing number of vessels positioned in West Coast Central America are expected to secure employment into the North Pacific, reducing charterers’ options for June cargoes loading out of West Coast South America. So far, the market has shown little indication of peaking, and many participants believe the upward momentum could extend into the early days of next week.

Backhaul cargoes remain scarce, while reluctance among owners and operators to transit the Panama Canal continues limiting available competition. Ongoing delays associated with the canal’s pre-booking system have made such voyages increasingly unattractive.

The Handysize market in the region also improved. A widening freight spread between Handysize and Supra vessels helped support sentiment, while East Coast South America activity influenced ballasting patterns and vessel positioning decisions.

More fixtures are expected to emerge for second-half May dates, potentially reducing the tonnage list to minimal levels next week. Since North Pacific business traditionally exerts less influence over Handysize employment in West Coast Central America, some owners may increasingly pursue APS-based fixtures loading directly from West Coast South America.

Conditions across the Continent remained considerably less dynamic. The Ultramax market opened quietly and retained an oversupplied character despite isolated signs of fresh cargo demand. Activity remained subdued throughout the week, with only a limited number of fixtures reported and very little new enquiry entering the market.

Although the tonnage list now appears to have stabilised after recent accumulation, prompt vessels still face restricted employment options and continue factoring idle days into their commercial calculations. By the close of the week, rates had largely stabilised following earlier negative corrections. Nevertheless, vessel supply remains relatively abundant, leaving the market vulnerable to additional softening.

The Handysize market across the Continent followed a similarly flat trajectory. Ascension Day naturally reduced trading activity across much of Europe, and although a few fixtures concluded earlier in the week, no meaningful movement developed in freight levels. Tonnage continues to exceed available cargo demand, maintaining pressure on owners and limiting any substantial improvement in sentiment.

In the Mediterranean and Black Sea, conditions diverged noticeably between west and east. The West Mediterranean Ultramax market began displaying firmer momentum as East Coast South America continued attracting vessels away from the region, gradually tightening local supply and strengthening owners’ negotiating positions.

The Eastern Mediterranean, however, remained comparatively stagnant. Cargo volumes were sufficient to maintain activity, but not enough to tighten the vessel list meaningfully. Opportunities existed, though still disproportionately small relative to the amount of open tonnage available. Encouragingly for owners, the number of available vessels has at least begun declining gradually.

For Handysize owners operating in the Black Sea and Eastern Mediterranean, the week proved challenging once again. Limited cargo demand and subdued fixing activity continued to dominate proceedings, while the shortened trading week offered little assistance.

Prompt tonnage kept building across the region, increasing the likelihood that additional vessels will ballast westwards in search of better employment. There were modest signs of improvement in fronthaul enquiry towards Singapore, Japan and East or South Africa, while inter-Mediterranean business softened slightly. Backhaul activity into East Coast South America also declined materially.

Further east, the Middle East Gulf and Indian Ocean Ultramax markets remained relatively subdued. Along the West Coast India corridor, limited fresh cargo enquiry and a small number of fixtures characterised another quiet week. Several salt cargoes surfaced for Far East destinations covering mid- to late-May dates, alongside a few prompt iron ore tenders.

Oman and Fujairah remained comparatively inactive, providing little support for prompt tonnage. Meanwhile, strengthening South African conditions encouraged additional vessels to ballast southwards in pursuit of firmer employment prospects.

East Coast India also experienced muted activity. Although some iron ore stems circulated, bid levels softened relative to recent concluded business. Nonetheless, the firmer Pacific environment continued lending support to the regional tonnage balance. Prompt Ultramax openings from East Coast India to China were offering around USD 17,000, while comparable fixtures reportedly concluded in the USD 16,000 range.

South Africaitself began the week slowly, but the market’s underlying fundamentals remained firm. Vessel availability stayed exceptionally tight, with less open ships competing for more cargo stems, primarily manganese and coal. Additional ballasters from the Indian subcontinent have begun entering the region following softer Middle East Gulf and West Coast India activity, yet prompt supply remains constrained.

Complicating matters further, severe weather and heavy storms forced several end-May laycans to be postponed, creating fresh uncertainty around scheduling and vessel positioning.

The Handysize market across the Middle East Gulf, Indian Ocean and South Africa remained broadly balanced overall, although backhaul cargoes continued commanding a premium over fronthaul employment.

In the Far East, Ultramax sentiment began the week on firmer footing as healthy cargo volumes supported activity early on before momentum eased slightly later in the period. Backhaul business remained the dominant segment.

North Pacific round voyages softened modestly, with an Ultramax in North China reportedly fixing near USD 17,000. Period business, however, strengthened on improving paper market sentiment. One Ultramax reportedly secured employment in the USD 19,000 range for one year, while a Supramax fixed at USD 19,000 for short-period employment.

Southern Far East conditions largely mirrored the north. Indonesian coal and clinker enquiry improved later in the week, while Australian and backhaul business remained steady. A Supramax opening South China reportedly fixed via Vietnam to West Coast Central America at USD 17,500 DOP.

The Far East Handysize market also strengthened notably following the return of market participants after Golden Week. Fresh cargo demand supported higher rates, with smaller vessels fixing in the mid-USD 15,000s for southbound voyages and larger units achieving USD 17,000–18,000 into South East Asia.

Backhaul sentiment also remained firm. Charterers valued Continent, Mediterranean and US Gulf voyages around USD 18,000, while owners targeted closer to USD 19,000. Period employment strengthened in tandem, with larger Handysize vessels now securing longer-term business in the USD 18,000 range. A 40,000 dwt unit reportedly fixed at USD 18,500 for consecutive voyages.

South East Asia and Australia provided some of the strongest momentum of the week. Fresh cargo requirements tightened tonnage availability rapidly, with prompt vessels absorbed early and charterers subsequently forced to raise bids to secure remaining ships.

Smaller Handysize vessels of 32–35,000 dwt fixed between the low USD 13,000s and USD 15,000 for Far East trips, while larger units achieved USD 17,000 and above across both Pacific and Australian round voyages.

Although East Australia remained relatively subdued, West Australia generated significantly stronger activity, particularly for end-May and early-June dates. Coastal business traded in the low USD 20,000s while owners increasingly sought mid-USD 20,000 levels.

This stronger sentiment also extended into short-period and consecutive voyage business, where a 42,000 dwt vessel reportedly secured employment around USD 18,000.

Looking ahead, market participants broadly expect bullish conditions to persist, particularly as first-half June tonnage already appears relatively lean across several Pacific regions.

In the period market, Atlantic Ultramax business strengthened modestly, supported mainly by the continued resilience of East Coast South America. Atlantic Handysize period activity, however, remained largely unchanged, as stronger earnings in the US Gulf and East Coast South America were offset by weaker backhaul conditions from the Continent and Mediterranean.

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