Bulk cargo is a product loaded into one large container for shipment, often commodities like grain or oil. Special equipment is required to move it, and shipping methods vary depending on location. The value is determined by the commodity market, and traders often speculate on its increase in value.
Bulk cargo refers to any product that is not packed separately, but is loaded into one large container for shipment. In most cases, it is a commodity, such as grain or oil, where the product may come from more than one producer, but go to the same customer, or at least the same intermediary. Bulk cargo can be shipped this way because the product is nearly uniform regardless of manufacturer and is generally sold by weight or volume.
In most cases, special equipment is required to move bulk cargo from one place to another. Shipping bulk goods often involves the use of airtight containers which help protect the product from moisture and other possible hazards. Cargo can be shipped in these containers by air, truck, rail, barge or ship, depending on the final location and whichever method is cheaper or faster for the customer. That person or business may have a shipping methods option.
When shipping by sea, a special cargo ship may be used. This vessel has large amounts of storage in hollow areas within the hull. Most vessels are used to carry dry cargo or liquids, and very few switch between shipping one product to another on a frequent basis. An oil tanker, for example, will typically perform this function throughout its useful life. May need a thorough cleaning and perhaps modifications to the cargo holds if a change has been made.
Since this type of cargo is unpacked, loading becomes another problem as traditional methods often fail. Instead, a truck or vessel is typically moved under a cargo arm of some sort. Then, the product is transferred to the container from that loading arm. In the case of a liquid, it may not take much more than just opening a valve. Some products, such as rocks from a quarry, can be moved along that load arm via a conveyor belt of some sort.
The value of most bulk commodities is usually determined by the commodity market, which is a market where raw products are traded. Often those interested in purchasing raw materials do not do so for the product itself, but rather speculate that it will increase in value. At some point, before a contract expires, these speculators have to sell or take delivery of the bulk cargo. Most traders have no practical use for the product itself and therefore have to sell even if it is at a loss.
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