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Global fleet growth expected

August 25 - The heavy lift and multipurpose (HL/MPV) shipping sector is under extreme pressure. With desperately low commodity prices laying waste to new capital projects, and increasing competition from other shipping modes for cargoes, the HL/MPV sector

The HL/MPV sector has been suffering from overtonnage issues for years. Therefore, the impeachment of container and dry bulk vessels into its market is an important factor to consider.

Christopher Palsson, head of Lloyd's List Intelligence consulting and chairman of the Interntional Maritime Statistics Forum (IMSF), said that global fleet growth is expected to be 3.5 percent over the next five years.

This pace of fleet development is in line with the anticipated global GDP growth. Trade is strong in the Middle East and parts of Africa; China's transition to a service-based economy has created a huge demand for infrastructure developments. Energy, too, is generating demand for vessels with around half of all cargoes carried at sea relating to the sector. US shale oil is adding to global supply, OPEC continues to pump at near-record levels, while Iran has entered the market with the removal of economic sanctions.

267 million dwt sits on the global orderbook - around 112 million dwt are tankers with just over 100 million dwt of the bulker and general cargo variety. Approximately 40 million dwt of container and ro-ro tonnage is on order.

The sheer scale of the global economy has continued to fuel container ship investments. "Large ship investments are the name of the game," said Palsson, despite overcapacity plaguing the sector.

However, the hunger for containerships will grow unabated, "with the rate of containerisation to continue to rise."  Therefore, can we assume that container lines will actively target cargoes from other shipping sectors - the breakbulk and project trades being prime targets?

What could provide some welcome relief for the MPV/HL operators was Palsson's optimism for the dry bulk sector. The orderbook-to-fleet ratio has fallen from a 2008 high of 16 percent to 13 percent, and could slide to the 10 percent mark.

If China does not implode and continues to grow at around 6-7 percent annually, and half of India's development plans materialise, "we have a future that is growing," said Palsson. If this is the case, bulk shipping "has to be an activity that picks up".

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