The aggressive targeting by container lines of the MPV (multipurpose vessel) market with “rock bottom” rates is set to continue, according to Drewry.

In its recently published Multipurpose Shipping Market Review and Forecast 2016, the shipping consultant says the past 12 months have been “dreadful” for the MPV market.

It says weak demand, coupled with falling commodity prices and the oversupply of tonnage in competing sectors, has brought freight rates down to levels not seen since the global financial crisis.

The main competition for MPVs has come from handy bulk carriers and containerships, where in the case of the latter, it says operators were prepared to offer rates at “close to zero” to fill empty slots on their ultra-large vessels.

And Drewry warns that given the container market is not expected to show any improvement for “two or possibly three years”, it’s likely that container carriers will “continue to aggressively target breakbulk and project cargo for the foreseeable future”.

Susan Oatway, lead analyst for multipurpose shipping at Drewry, commented: “We expect the effective demand for the MPV fleet to return to a positive trend with average annual growth of 2.7% to 2020. However, the growth will be very subdued through 2016 and will not show any significant improvement until the end of 2017.”

Part of Ms Oatway’s caution is due to the aggressive competition element from the other sectors, but there is also concern over the lack of project finance.

In stark contrast to the container sector, the MPV fleet is growing very slowly, says Drewry. It has assessed future newbuild deliveries, potential scrappage candidates and slippage at the yards to estimate supply growth of less than 0.5% a year until 2020.

But, given the continuing competition factor, Drewry is worried that owners of MPVs may not last the distance.

It says “there is a very real risk for the financial stability for a number of companies”, given that owners have already “borne untenable market conditions” for some time.

Nevertheless, Drewry thinks that for the fittest there is light at the end of the tunnel for the MPV market.

Ms Oatway concluded: “All this suggests that for those that can survive 2016 and position themselves with unique qualities – whether that is financial stability, good management, eco-friendly engines or extraordinary lift – there is an end to this recession.”