Rio Tinto | Minerals and Metals for the world

Cargoes 2002
Dirty British coaster with a salt-caked smoke stack, Butting through the Channel in the mad March days, With a cargo of Tyne coal, Road-rail, pig-lead, Firewood, iron-ware, and cheap tin-trays.

These days it may not be as dirty or romantic, as in John Masefield's famous verse, but all the year round, vessels laden with iron ore, coal, bauxite, alumina, copper, borax, salt and a host of other mineral commodities produced by Rio Tinto ply the world's sea lanes, transporting vital supplies to customers across the globe.

In fact, roughly 200 million tonnes of Rio Tinto minerals, representing about ten per cent of the world's seaborne dry bulk trade, are exported every year and the bill for this massive shipping exercise comes to well over US$1.25bn.

Rio Tinto itself does not have its own shipping fleet and large quantities of its exports are moved on vessels owned or chartered by customers. In other words, the sales are "FOB" (free on board) at the loading port, with the customer supplying the ship and paying for all the freight costs.

But increasingly there is a recognition that taking responsibility for shipping product to the customers adds value by exploiting inefficiencies in the supply chain. As a consequence there is a large – and growing – slice of business concluded on a "delivered" basis.

Until relatively recently, each business division made its own arrangements for handling these "delivered" contracts. So, for example, iron ore from Australia would be transported on vessels chartered by Hamersley's in-house shipping team.



Cargoes 2002 Dirty British coaster with a salt-caked smoke stack, Butting through the Channel in the mad March days, With a cargo of Tyne coal, Road-rail, pig-lead, Firewood, iron-ware, and cheap tin-trays. These days it may not be as dirty or romantic, as in John Masefield's famous verse, but all the year round, vessels laden with iron ore, coal, bauxite, alumina, copper, borax, salt and a host of other mineral commodities produced by Rio Tinto ply the world's sea lanes, transporting vital supplies to customers across the globe. In fact, roughly 200 million tonnes of Rio Tinto minerals, representing about ten per cent of the world's seaborne dry bulk trade, are exported every year and the bill for this massive shipping exercise comes to well over US$1.25bn. Rio Tinto itself does not have its own shipping fleet and large quantities of its exports are moved on vessels owned or chartered by customers. In other words, the sales are "FOB" (free on board) at the loading port, with the customer supplying the ship and paying for all the freight costs. But increasingly there is a recognition that taking responsibility for shipping product to the customers adds value by exploiting inefficiencies in the supply chain. As a consequence there is a large – and growing – slice of business concluded on a "delivered" basis. Until relatively recently, each business division made its own arrangements for handling these "delivered" contracts. So, for example, iron ore from Australia would be transported on vessels chartered by Hamersley's in-house shipping team.
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Review is published by Rio Tinto, 6 St James' Square, London SW1Y 4LD, England Telephone +44 (0)20 7930 2399 Editor: Cherry DeGeer