Latest news from Heavy Lift & Project Forwarding International Magazine

Another two years of misery, says Drewry

April 14 - Drewry predicts that the multipurpose shipping market is not expected to recover until the end of 2017, when it is anticipated that there will be more bulk demand for Handysize tonnage and therefore more breakbulk cargoes for multipurpose vesse

In its latest Multipurpose Shipping Market Review and Forecast 2016 report, the global shipping consultancy states that the last 12 months have been dreadful for the multipurpose vessel market with rates at rock bottom and competition for cargo from every angle.

Weak demand, coupled with falling commodity prices and the oversupply of tonnage in competing sectors has brought rates down to levels not seen since just after the global financial crisis.

The demand for multipurpose shipping registered a drop of almost 3 percent in 2015 as global demand for dry cargo slowed considerably while, increasing competition in the MPV sector.

The main competition faced by the MPV sector comes from Handy bulk carriers and containerships. The market for tonnage in the first category ended 2015 on its knees with earnings less than half the operating costs for the vessels, whilst the container lines were offering rates at close to zero just to hang on to market share.

Going forward, Drewry predicts that dry cargo growth is set to improve in 2017 and beyond but the return to growth for the MPV market share will be almost entirely dependent on the competing sectors.

It adds that whilst it is confident that both breakbulk and project cargo demand are showing signs that, in the medium term at least, volumes will return to growth trends, it is not confident that the competing sectors will move back to their more traditional cargoes anytime soon.

Of concern to operators of MPV fleets is Drewry's predication that the container market is not expected to show any improvement for two and possibly three years, with operators in that sector likely to continue to aggressively target breakbulk and project cargo for the foreseeable future.

In order to estimate the effective demand for the MPV fleet, Drewry assesses the demand for all possible commodities and the modal split for these between bulk, breakbulk and container.

Susan Oatway, lead analyst for multipurpose shipping comments: "We expect the effective demand for the MPV fleet to return to a positive trend with average annual growth of 2.7 percent to 2020. However, this growth will be very subdued through 2016 and will not show any significant improvement until the end of 2017. This is due to a combination of the lack of project finance and aggressive competition from the container and Handy bulk carrier sectors. "

The supply of multipurpose vessels to carry this cargo is growing very slowly as well. Drewry has assessed future newbuilding deliveries, potential demolition candidates and slippage at the yards to determine that the future fleet will grow at less than 0.5 percent a year to 2020.

However, more interestingly, the project carrier fleet is expected to grow at almost 4 percent a year, whilst the 'simple' MPV fleet will contract at a rate of almost 3 percent a year.

Drewry adds that owners have borne untenable market conditions for longer than expected but now there is a very real risk for the financial stability for a number of companies.

"All this suggests that for those that can survive 2016 and position themselves with unique qualities - whether that is financial stability, good management, eco-friendly engines or extraordinary lift - there is an end to this recession. While we do not see any sign that, even in the longer term, the market will return to pre-2009 levels, it should see enough improvement to recover to 2011 levels by the end of our current forecast period," added Oatway.

Drewry's Multipurpose Shipping Market Review and Forecast 2016 is an annual report published by Drewry Maritime Research and is priced at £1,495 for a single issue.


www.drewry.co.uk

Heavy Lift | News

BigMove goes digital for licenses thumbnail image

BigMove goes digital for licenses

July 17 - BigMove – a European alliance of 13 medium-sized logistics companies – is introducing digital driving licenses for its network of 1,000 drivers.
Views: 16
ESTA joins EC best practice project thumbnail image

ESTA joins EC best practice project

July 16 - The European association of abnormal road transport and mobile cranes (ESTA) has been asked to support a European Commission study to “explore health, safety and environment (HSE) best practice in the wind power sector”.
Views: 499
LDA installs kite system  thumbnail image

LDA installs kite system 

July 16 - Louis Dreyfus Armateurs (LDA) has fitted its ro-ro vessel Ville de Bordeaux with an AirSeas kite system, as it looks to develop the use of wind propulsion technologies.
Views: 432
Sarens partners with Moir Crane thumbnail image

Sarens partners with Moir Crane

July 16 - Sarens has teamed up with Canada’s Moir Crane as the two companies look to capitalise on the region’s upcoming construction projects.
Views: 551

Heavy Lift Across The World

Discover heavy lift and project logistics industry news from around the world by region.