The marine industry is a vital link in international trade, with ocean-going vessels representing the most efficient, and often the only method of transporting large volumes of basic commodities and finished products. In 2004, approximately 2.5 billion tons of dry bulk cargo was transported by sea, comprising more than one-third of all international seaborne trade.

The balance of seaborne trade involves the transport of liquids or gases in tanker vessels and includes products such as oil, refined oil products and chemicals. The demand for dry bulk carrier capacity is determined by the underlying demand for commodities transported in dry bulk carriers, which in turn is influenced by trends in the global economy. Seaborne dry bulk trade increased by slightly more than 2% annually during the 1980s and 1990s. However, this rate of growth has increased dramatically in recent years. Between 1999 and 2004, trade in all dry bulk commodities increased from 1.97 billion tons to 2.46 billion tons, an increase of 25%.

Between 1999 and 2004 ton-mile demand in the dry bulk sector increased by 25% to 11.5 billion ton-miles. For some commodities there has been over the years a shift in demand due to changing trade routes. For example the Brazil to China iron ore route started to be a significant trade some six to eight years ago. The increase in trade on this route has an increased effect on the demand for shipping due to the length of the haul. Conversely as Chinese demand has grown, there has been some shift in the sourcing of iron ore from Pacific regions (Australia). This has not yet reached significant proportions to affect the ton-mile demand.

The Company owns a modern fleet of Handymax dry bulk vessels that it has purchased or agreed to purchase from unrelated third parties. The Company has taken delivery of nine vessels and expects delivery of two vessels in July and August 2005. The Company’s 11 vessel fleet has a combined carrying capacity of 540,456 dwt and an average age of only six years, as compared to an average age for the world Handymax dry bulk fleet of over 15 years.

The Company believes that owning a modern, high quality fleet reduces operating costs, improves safety and provides with a competitive advantage in securing employment for the Company’s ships. The Company’s fleet was built to high standards and 10 of its vessels were built at leading Japanese shipyards.

The Company’s fleet includes a group of five identical sister ships. Operating sister and similar ships provides the Company with operational and scheduling flexibility, efficiencies in employee training and lower inventory and maintenance expenses.

The Company has entered into agreements to time charter nine of its 11 vessels and expects to enter into time charters on similar terms for the Company remaining two vessels. The Company’s charters range in length from one to three years with an average of approximately two years and provide for fixed semi-monthly payments in advance. A time charter involves the hiring of a vessel from its owner for a period of time pursuant to a contract under which the vessel owner places its ship (including its crew and equipment) at the service of the charterer. Under a typical time charter, the charterer periodically pays the Company a fixed daily charter hire rate and bears all voyage expenses, including the cost of fuel and port and canal charges. The technical operation and navigation of the vessel at all times remain the Company' responsibility, including vessel operating expenses, such as the cost of crewing, insuring, repairing and maintaining the vessel, costs of spare parts and supplies, tonnage taxes and other miscellaneous expenses.

Vessels operating voyage charters in the spot market typically are chartered for a single voyage, which may last up to several weeks. Vessels operating in the spot market may generate increased profit margins during periods when charter rates are strong, while vessels operating on fixed time charter generally provide more predicable cash flows. Under a typical voyage charter in the spot market, the Company will be paid freight on the basis of moving cargo from a loading port to a discharge port. The Company will be responsible for paying both operating costs and voyage costs and the charterer will be responsible for any delay at the loading or discharging ports.

The Company’s vessels operate worldwide within the trading limits imposed by its insurance terms and do not operate in areas where United States or United Nations sanctions have been imposed.

All of the Company’s vessels fly the Marshall Islands flag.

other factors affecting spot market charter rates for dry bulk carriers.

When the Company employs its vessels on voyage charters it will incur expenses that include port and canal charges, bunker (fuel oil) expenses and commissions.

Vessel operating expenses include crew wages and related costs, the cost of insurance, expenses relating to repairs and maintenance, the cost of spares and consumable stores, tonnage taxes and other miscellaneous expenses.