Dirty barges, not so dirty anymore

The DPP (dark petroleum products) market, also known as the dirty barge market, has come out of it’s shell since the past 4-5 years. Historically, DPP barges occupied a less favourable position in the market, earning significantly less per ton compared to CPP (clean petroleum) barges.

ARA trip rates were fixed at industry standards, typically at €1.50, €2.50, or €3.50 per tonne, with little room for negotiation. In the past, charterers enjoyed
a relaxed chartering environment. DPP barges were readily available, with some idling or becoming available within a day. This meant stress-free cargo loading for charterers, with little concern about potential delays. Before the current DPP barge shortage, prices had dipped below industry DPP rates, settling at as low as 1, 2, or 3 euros per tonne (p/t) in the ARA region.

As the clean petroleum (CPP) market gained momentum, DPP barges faced a double challenge: a decline in available trips and lower profitability. Consequently, some DPP barges underwent cleaning procedures to become CPP-classified, allowing them to operate in the more lucrative clean products market.

This coincided with new regulations limiting the sulphur content of bunkers for seagoing vessels to 0.5% as of 2020. Only vessels equipped with scrubbers can use high-sulphur bunkers (3.5%). To prevent contamination from off-spec bunkers, charterers and bunker companies adopted dedicated barges for VLSFO and ULSFO fuels.

This separation created a market with three distinct fuel types: HSFO, VLSFO, and ULSFO, which is also a contributing factor to the tight DPP market. Charterers rely heavily on DPP barges for their planning, as these vessels are essential for several reasons.

First, refineries need DPP barges to transport "dirty products" for economic viability or blending purposes used in bunkers. Second, bunkering seagoing vessels is a critical operation; missing these scheduled refuelling’s can result in penalties or even lost clients. The scarcity of spot barges has driven a surge in long-term time charters for DPP barges.

Charterers are increasingly securing long-term contracts to guarantee transportation, with some barges even placed on standby for days or weeks. The DPP spot market has shrunk significantly over the past 4-5 years. Currently, only two or three brokers offer a combined total of 5-6 spot barges in the ARA region. With prices ranging in ARA from 7/8/9 euro per ton.