Increased demand for breakbulk transport is expected to drive growth in the multipurpose shipping sector in the second half of 2017, according to the latest research from global shipping consultancy Drewry.
The forecast suggests an increasingly positive outlook for project shippers, as Drewry predicts the “breakbulk sector strengthening from the lowest levels seen in 2016,” and that this trend forecast will continue in the medium term at least.
“Whilst we believe that 2017 will be slow, the prospects for the second half of the year and into 2018 continue to strengthen and give rise to our optimism for this sector,” said Susan Oatway, lead analyst for multipurpose shipping at Drewry.
Alongside a stronger macroeconomic picture, another driver for pure-play project cargo shippers is the prediction that competition from bulk carriers and container ship operators is set to decline this year.
With margins tight over the past two years, many container lines had started to encroach onto breakbulk carriers traditional markets, but Drewry suggests this trend may now be waning.
“Some container lines have declared a lessening interest in the more problematic cargoes that these ships are suited to carry,” a spokesperson for Drewry said, adding that drivers ranging from “crude steel production and oil prices to global GDP and investor confidence” all pointed to a strengthening picture for 2017.
Fleet Growth to Stagnate
Following several high-profile bankruptcies, consolidations and cuts to investment in the multipurpose sector, Drewry now forecasts that the global multipurpose fleet will stabilize with fleet growth of 0.2 percent per annum for the medium term.
Within this projection, Drewry forecasts that project carriers with lift capability greater than 100 tonnes are forecast to see the highest growth, increasing by 3 percent per annum, while the “simple” multipurpose fleet is set to decline at about 2 percent per year.
Drewry published its findings in its latest Multipurpose Shipping Market Review and Forecast report, which includes detailed analysis of both historical performance and forward trends for the sector.
Photo: Development of MPV market share. Credit: Drewry