Over the last few years, inverse finite element method (iFEM) is shown to be one of the most robust and general algorithms for the purpose of shape and stress sensing. This study concerns the application of iFEM methodology to a capsize bulk carrier and investigates an appropriate sensor placement configuration for better structural health monitoring of the vessel. The measured uniaxial strain data, e.g. the ones collected from fiber Bragg grating (FBG) sensors, are processed by the developed iFEM framework. For this purpose, hydrodynamic and finite element analyses are performed to generate simulated FBG sensor - strains data for the bulk carrier floating in head sea wave condition. Up to ten percent white noise is added on the numerical strain data to represent experimental strain measurements collected from real FBG sensors. The influence of FBG sensor locations as well as noise level in the strain measurements are examined versus the solution accuracy. Based on the displacement and stress comparison between iFEM and the reference solutions, it was observed that a sparse deployment of FBG sensors is sufficient to predict accurate bending response of the vessel. Hence, practical applicability of iFEM technology together with FBG sensors is demonstrated for the bulk carriers.