December 21 - According to global shipping consultancy Drewry, although demand growth is expected to recover next year after a very poor 2015, and supply growth is likely to be minimal, competition from other sectors will maintain pressure on the breakbul
The IMF has downgraded its expectations for both GDP and trade volume growth for 2015 and 2016. In addition, said Drewry, container shipping demand recorded its slowest rate of growth in the third quarter of this year since 1979 (excluding 2009).
"We expect further container shipping penetration into the project market and handy bulk carrier penetration into the breakbulk sectors," suggested senior associate at Drewry, Susan Oatway. "These factors will result in reduced market share for the multipurpose shipping fleet."
While demand is growing, with dry cargo demand expected to reach average annual growth of 3 percent in the period to 2018, Drewry forecasts that competition from other shipping sectors will mean that the multipurpose fleet share is only expected to reach average annual growth of 1.4 percent over the same period.
"Our view is that improvement in this sector is still some way off. Overcapacity coupled with low freight rates is still a challenge for the profitability of dry bulk and container shipping sectors, and this is increasing their competition for both project and breakbulk cargoes," added Oatway.
Meanwhile, said Drewry, the project carrier fleet is growing at a much faster rate than the simpler multipurpose fleet, with vessel technology improving every year, whether in terms of lift capacity or design.
Drewry suggests that this sector's ability to innovate - for example with the recent delivery of vessels equipped with DP (dynamic positioning) systems - will be critical to its future in the face of continuing market share erosion of conventional commodities.