It’s tricky to summarise the current state of play in the project logistics and heavy lift shipping sectors. Whether the glass is half full, or half empty, is very much situation dependent.
Across the course of 2023 demand has been there, albeit patchy. Some projects signed in previous years, propelled by state-supported pandemic recovery packages and continuing demand for renewable energy, moved into the execution phases during 2023 – and many project freight forwarders reported a buoyant market.
However, there has been a lull. Multipurpose time charter rates continued their steady decline over the past 12 months – and although some carriers reported strong activity and full ships, particularly in the APAC region, others feel the year has proven something of a damp squib. A consolation: rates are still some 40 percent higher than they were pre-covid.
Europe’s summer season was particularly slow this time around. The offshore renewable energy sector, as forecast, was slow in the first two/three quarters of this year. And, while some are reporting strong pipelines in this market into 2024 and are optimistic for the years ahead, others are tempering optimism given the inflationary pressures that have derailed some major wind energy projects in the UK and the USA. Oil and gas, however, is buoyant with prices high, strong demand, and NOCs/majors flush with funds.
Inflation is still an issue in many markets and stands well above many central banks’ 2 percent targets. It’s precariously balanced and one gets the feeling that another crisis – or the escalation of one of the many presently unfolding – could ruin a year’s worth of policymakers’ economic belt-tightening, or in the worst case, send economies tumbling. While many project pipelines look solid now, should market confidence get a rollicking again it may send a swathe of projects to the right.
One trend that continued during 2023 that may well serve to firm up supply chain resilience against future crises is the diversification of sourcing strategies. Nearshoring, friendshoring, or plus-one sourcing strategies have become common phrases in the project logistics vernacular, largely because of the disruption caused by covid but also as a way of protecting supply chains against geopolitical tensions. This has been particularly the case in Asia, where China-plus-one sourcing strategies have seen APAC hubs strengthen their offering and gain market share.
That, at least, was the consensus among panellists of our inaugural Project Cargo Conference that took place in Singapore on November 3, alongside the transport logistic Southeast Asia & air cargo Southeast Asia exhibition. Bringing together leading executives from the project logistics supply chain in the region, the conference looked at key themes facing the Southeast Asian project cargo market, the project hotspots and the challenges facing multipurpose shipping and logisticians. Regarding a shift in sourcing strategies, our panellists identified India as a particular beneficiary and noted that while North Asia and China will remain a core market, supply chain resilience is increasingly considered by manufacturers – the shift will be a super-marathon, not a sprint.
Certainly, the super-marathon issue of recruitment and retention remains unsolved, and many in the project logistics community are citing this as the biggest risk facing the sector in the coming years. Project forwarders need to add or grow their teams in order to keep up with customer’s demands and a growing industry – new blood is required and their training paramount to success.
The old saying that the project logistics sector is a ‘people’s business’ still rings true and this year we relaunched our ‘HLPFI meets’ articles in the magazine with the help of Justin Archard. Throughout the year, Justin sat down with some of the leading figures in the industry including RedBox Energy Services’ Philip Adkins, BigLift’s Wout van der Zwan, Varamar’s Alexander Varvarenko, UHL’s Lars Bonnesen and AAL Shipping’s Kyriacos Panayides. We hope you enjoyed the candid insights into their lives and careers as much as we did.
Of course, another way that we at HLPFI like to celebrate the people of the industry is at our annual Heavy Lift Awards. This year, the fifth iteration of the event took place at the Royal Lancaster Hotel in London on October 25 – drawing in our biggest crowd to date to raise a collective toast to the achievements of the sector. If you haven’t had a look at the incredible entries and winners for this year’s Heavy Lift Awards, browse our website here.
As 2023 comes to a close, HLPFI has once again compiled our end of year review to reflect on what has been another challenging yet rewarding year. Take a look at our thoughts here:
Full ships or a damp squib? Gauging the multipurpose market
Mergers, acquisitions, and expansion: A year of consolidation
Flying high and beefing up capabilities
We thank you for your continuing support, and all the best for a prosperous 2024.
