Page 14: of Maritime Logistics Professional Magazine (Jul/Aug 2019)

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MULTIPURPOSE SHIPPING OUTLOOK

Trust and

Independence:

Key metrics for a consolidating market of Multi-Purpose Vessels.

By Kyriacos Panayides he multipurpose sector has experienced a tough ? rst half of 2019, following a trend of dif? cult market conditions spanning over a decade. Fallout from ongoing global political trade discussions

Tis taking its toll on both project and commodity trades, cutting down volumes at a time when external compe- tition from non-MPV carriers is at its most ? erce and the MPV ? eet is still struggling with overcapacity. Still, and as it has been noted by a number of stakeholders, the number of ves- sels with lift capacity of less than 100t SWL is in decline and this trend is expected to continue for the foreseeable future.

The overhaul of marine fuel driven by the impending IMO 2020 deadline has not thinned out the MPV ? eet as much as some had anticipated. In fact, Drewry has reduced its forecast- ed demolition tonnage for 2019 by 17% in its latest quarterly report. This stems from the fact that most MPV carriers are planning to pass on the cost of the expensive low sulphur fuel oil to their customers. This levels the playing ? eld for older vessels as it dodges the vast investment required to adopt al- ternative compliance options such as ? tting scrubbers or LNG tanks, which would force older, less ef? cient, and less special- ised vessels towards demolition – resulting in an aging ? eet service under budget. At AAL, we’ve managed to uphold our with limited lifting capacity, a lack of specialization that end commitment to our customers in this dif? cult market through users need, and leading to concerns amongst them about the prudence and effective forward planning. Without these cor- nerstones, it can prove dif? cult to retain business and gener- safety of their cargoes during transit.

Meanwhile the MPV ? eet is still fending off competition ate pro? t in a time of reduced freight rates, as we’ve seen in from bulkers and feeders side-stepping into the sector in numerous recent cases in the project cargo sector.

search of project cargos to buffer against their own declining

INVESTING IN TOMORROW commodity trades. The combination of elements contribut-

Today freight rates for international ocean-going trade have ing to the struggling multipurpose market has been enough to been largely governed by the tumultuous global political land- drive some carriers towards consolidation strategies and oth- ers out of business altogether, with owners of smaller ? eets in scape. The trade spat between the United States and China has put the brakes on several commodities, including steel – with particular unable to make up their losses.

Multipurpose operators, vying to retain their independence direct repercussions for the multipurpose market – and bulk within the consolidating market, need to be strong in their cargoes like coal, grain, and iron ore. Furthermore, some ma- positioning and their service offering. It takes unparalleled jor LNG projects in the United States have been postponed due to the trade uncertainties ahead. industry knowledge, expert engineering capabilities, a state-

The decline in bulk cargo trade, illustrated in Toepfer Trans- of-the-art ? eet, and a solid reputation for delivering excellent 14 Maritime Logistics Professional July/August 2019 | |