Multipurpose shipping has started 2018 on a confident footing and is forecast to recover further on rising demand, contracting vessel supply and lessening threats from competing sectors.
The multipurpose shipping market, which comprises both breakbulk and project cargo sectors, has struggled over the last few years but conditions are now ripe for recovery, shipping consultancy Drewry said in its latest Multipurpose Forecaster.
Dry cargo demand is growing, with a number of drivers reporting improving conditions, whilst the multipurpose fleet is contracting as older, smaller, less heavy lift capable tonnage is weeded out.
“This year has started with renewed optimism and it is Drewry’s belief that the market has finally turned that corner,” Susan Oatway, Drewry’s lead analyst for the multipurpose sector, said.
“Rate rises are never stratospheric in this sector, but we believe a steady growth of around 2-3% per year is possible over the forecast period.”
However, due to the diversity of drivers that supports this sector there are still some concerns that could impact the outlook over the medium term.
The simple multipurpose fleet, that is those vessels with lift below 100 tons, has already started to contract at a rate that is affecting the whole fleet. However, Drewry believes that the future is with the project carrier sector, i.e. those vessels with lift greater than 100 tonnes.
“Some 80% of all newbuildings over the last five years have heavylift capability, and at least 70% of the orderbook has this capability. The project carrier fleet is growing, but it will be some time before it reverses the decline in the overall multipurpose fleet,” Oatway concluded.