Increased focus on high and heavy as well as breakbulk and project cargo is providing some relief for car carriers, with operators ordering more flexible vessel designs in recent years, says global shipping consultancy Drewry.
Car carrier shipping is expected to continue its recovery from the trough of 2016, adds Drewry, explaining that this is supported by improving utilisation rates.
However, in its Finished Vehicle Shipping Annual Review and Forecast, the consultancy pointed to increasing localisation and the threat of trade wars slowing the sector’s growth, while carrier operational efficiency will be challenged by the emergence of new trades and ports of call.
“Despite improving utilisation and a record low orderbook, owners and operators are holding off acquiring capacity, whether through ordering, sales and purchase or chartered in tonnage, as trade uncertainty weighs on the market,” said Tom Ossieur, head of car carriers at Drewry.
“Overall, car carrier efficiency has fallen by 39 percent since 2007 as vessels sail at slower speeds and spend more time in ports,” said Ossieur. “Drewry does not foresee significant improvements forthcoming. Lower speeds, shorter routes and trade lane imbalances are here to stay.”
While in recent years operators have ordered more flexible vessel designs, some are shunning fleet additions in favour of port and land-side logistics investments that offer better returns.