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What is Bulk Cargo?

By Ken Black
Updated May 17, 2024
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Bulk cargo refers to any product that is not separately packaged, but rather is loaded into a single, large container for shipment. In most cases, this is a commodity, such as grain or oil, where the product may be coming from more than one producer, but going to the same customer, or at least the same intermediary. The bulk cargo can be shipped this way because the product is nearly uniform no matter who the producer is, and it is generally sold by weight or volume.

In most cases, special equipment is needed to move bulk cargo from one location to another. Bulk cargo shipping often involves using airtight containers that help product the product from moisture and other possible dangers. The cargo may be shipped in these containers by air, truck, rail, barge or ship, depending on the final location and whatever method is cheaper, or quicker, for the client. That person or business may be given an option of shipping methods.

If shipping by sea, a specialized bulk cargo ship may be used. This ship has vast amounts of storage in hollow areas inside the hull. Most ships are used to carry dry goods or liquids, and very few will move from shipping one product to the other on a frequent basis. An oil tanker, for example, will typically perform that function throughout its useful life. A thorough cleaning, and perhaps changes to the cargo holds, could be needed if a switch was made.

Given the fact that this type of cargo is not packaged, loading it becomes another issue as traditional methods often fail to work. Instead, a truck or ship is typically moved under a loading arm of some type. Then, the product is transferred into the cargo container from that loading arm. In the case of a liquid, it may not take much more than simply opening a valve. Some products, such as rocks from a quarry, may be moved along that loading arm via a conveyor belt of some type.

The value of most bulk cargo is usually determined by the commodity market, which is a market where raw products are traded. Often those interested in buying commodities are not doing so for the product itself, but rather speculating on the fact that it will increase in value. At some point, before a contract matures, these speculators must sell, or accept delivery of the bulk cargo. Most traders have no practical use for the product itself, and therefore must sell even if it is for a loss.

About Mechanics is dedicated to providing accurate and trustworthy information. We carefully select reputable sources and employ a rigorous fact-checking process to maintain the highest standards. To learn more about our commitment to accuracy, read our editorial process.

Discussion Comments

By anon328011 — On Apr 01, 2013

Can anyone explain to me what exactly is a disbursement account and what is free disbursement? I don't understand anything about this and want to understand in detail what exactly this is, and who should appoint/pay discharge port agents and port fees in case of bulk chartering of the vessel.

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