Instead of going into details here I would suggest reading this informative post at the Old School Value blog.
discloure: I own shares of VVTV
I am a green personal investor stumbling through the world of financial investing and sharing my experiences, thoughts, and questions along the way.
"Dry bulk shipping refers to the movement of significant commodities carried in bulk : - the so-called major bulks, together with ships carrying steel products (coils, plates and rods), lumber or log carriers and other commodities classified as the minor bulks."
…an assessment of the price of moving the major raw materials by sea. Taking in 26 shipping routes measured on a timecharter and voyage basis, the index covers Supramax, Panamax, and Capesize dry bulk carriers carrying a range of commodities including coal, iron ore and grain.Every business day The Baltic Exchange in London calls shipping companies around the world and gets quotes for moving various stuff across various routes in the different sizes of ships (Supramax, Panamax, etc...). From this derive the index. It kind of like the LIBOR for the shipping.