Light at the End of the Tunnel for Multipurpose Shipping?
The demand outlook for the multipurpose fleet has not improved since the first quarter of 2016. The breakbulk and project cargo sector remain weak, with little suggestion that volumes will improve significantly until the end of 2017, according to the latest Multipurpose Shipping Market Review and Forecaster report published by global shipping consultancy Drewry.
On the other side of the equation, the supply of multipurpose vessels is under control, with an
order book equivalent to just five percent of the operating fleet and growth estimated at less than one-half of one percent per year between now and 2020.
However, it is the oversupply of the competing fleets that continues to erode the market share available to the multipurpose sector and in turn any positive growth.
Drewry believes that improvement in this sector is under way, but it is still some way off – and that is being optimistic. It is clear that the multipurpose shipping community can do little to improve the demand for these vessels, at a time when projects are being canceled and steel production halted,
but there is something to be done on the supply side. While it is true that most of the damage is
being done by the oversupply of bulk and container vessels, there is still a view in the market that the problem lies elsewhere.
There are over 600 vessels trading that are over 25 years old, which is 20 percent of the operating fleet in number terms and 13 percent in capacity terms as the majority are less than 10,000 dead weight tons. Although these vessels generally only compete in the breakbulk trades, that is where the cargo is at the moment, and so, they compete across the majority of the fleet.
“This competition will impact rates across the sector,” said Susan Oatway, Drewry’s lead analyst for multipurpose shipping, “as high spec project carriers will need to carry any cargo to fulfill their investors’ requirements.”
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