Latest news from Heavy Lift & Project Forwarding International Magazine

Bleaker outlook for multipurpose sector 

Drewry has downgraded its outlook for the multipurpose shipping market in light of weaker projected global economic growth, greater competition from dry bulk and container sectors, and a lack of ship demolition activity.

The bedrock to multipurpose demand is dry cargo, which is made up predominantly of dry bulk and general cargo, said Drewry. With the ongoing tariff war affecting Chinese steel production, expectations for dry bulk iron ore volumes have weakened over the first half of 2019.  

On the plus side, however, concerns that the same tariffs would affect steel cargoes have proved unfounded. Imports into Europe and the Far East (excluding China), meanwhile, have improved and the overall situation is improving as new trading partners are sought.

Drewry expects dry bulk and general cargo volumes to increase at an average annual rate of around 2 percent in the medium term. 

With regard to competition, the bulk and container markets continue to encroach on the multipurpose sector in both the carriage of breakbulk and project cargo, fuelled, in part, by the increasing containerisation of cargoes, according to Drewry.

Furthermore, with uncertainty rising across the globe due to tariff wars, the rise in populist policies and a slowing Chinese economy, all dry cargo sectors have been affected by slowing demand – and this means greater competition for the cargo that is available.

Ageing vessels represent approximately 12 percent of the multipurpose fleet, and over the first half of the year there has been no indication that owners are starting to scrap this tonnage, added Drewry.  

This all amalgamates into a bleaker forecast for the sector. Drewry said that average rates for a 10,000-15,000 dwt multipurpose vessel at the end of 2018 were approximately USD6,650 per day, but for 2019 they have already slipped by 4 percent to USD6,630 per day. Going forward Drewry sees little possibility of this improving before 2021, unless demolition levels suddenly increase.

Despite the negative indicators, there are reasons to remain hopeful. Project cargo volumes are expected to improve over the second half of 2019, as a number of projects get to the cargo-carrying stage. Drewry said that modern, heavy lift ships should be able to secure improved forward rates.

Equally, if Drewry’s expectations for the trade war are correct and actual cargo demand issues are limited, there is hope that container lines will take a less aggressive stance, allowing the multipurpose fleet to take back more market share. 

www.drewry.co.uk

Heavy Lift | News

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: 737
Gulf of Guinea still piracy hot spot thumbnail image

Gulf of Guinea still piracy hot spot

July 15 - Of the 75 seafarers taken hostage or kidnapped for ransom worldwide this year so far, 62 were captured in the Gulf of Guinea – off the coasts of Nigeria, Guinea, Togo, Benin and Cameroon – according to the International Maritime Bureau (IMB).
Views: 714
Maersk sets ambitious logistics goals thumbnail image

Maersk sets ambitious logistics goals

July 10 - A.P. Møller Mærsk reportedly wants half of its earnings to come form inland logistics, according to a report in the Wall Street Journal (WSJ).
Views: 1867
Logistics confidence in the UK drops thumbnail image

Logistics confidence in the UK drops

July 5 - Optimism in the UK’s logistics industry has fallen to its lowest level on record, according to the latest Logistics Confidence Index from Barclays and accountancy and business advisory firm BDO.
Views: 1427

Heavy Lift Across The World

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