May 19 - These might be trying times for heavy lift shipping lines, but they are not necessarily terminal. That's the view of Fred Bedford, a member of the board of Jumbo Shipping, speaking at the Breakbulk Europe event. Ian Matheson reports from Antwerp.
Addressing what the future holds for breakbulk and heavy lift shipping companies, Bedford said that one of the best barometers of the state of the market was vessel lay up numbers, suggesting that few vessels from the heavy and multiple purpose fleet are currently laid up. Some are spending longer than normal in repair and maintenance programmes and slow steaming is common practice added Bedford.
On demand and supply imbalance issues, Bedford cast doubt on the notion that natural wastage of old MPVs via scrappage would leave space for the significant numbers of newbuildings of all types that are due to be delivered over the next two years.
"This is not comparing like with like," said Bedford. Ship design has advanced massively over the last 25 years. Heavier items of cargo can be handled by the ships and productivity is much better. Trade patterns have changed. Speeds have increased. In fact, Bedford added, he had seen little evidence of many tweendeckers being scrapped in any case.
Looking forwards, Bedford said that he believed that shipping rates for heavy lift and multipurpose vessels may have bottomed out but will remain depressed for at least another two years. Turning to history, Bedford said that traditionally freight rate improvement in the breakbulk market lags behind growth improvements in the global economy by about two years.
Turning to unexpected events, Bedford queried what the effect the recent oil pipeline disaster in the Mexican Gulf might be. If it leads to a review of the regulatory regime, will it lead to petrochemical companies reassessing the feasibility of projects which have been given fresh impetus by recent increases in oil prices, possibly leading to delays or postponement of those projects?
Such unforeseen situations can easily "snuff out" any signs of an early recovery in demand and rates, said Bedford who concluded that a significant increase in freight rates under current market conditions is unlikely."