News / MPV and heavylift sector facing mid-term headwinds as global trade slows

The multipurpose vessel (MPV) and heavylift shipping sector is set for 3.8% growth this year, declining to 1.4% in 2020, as the global economy slows and competition for cargo grows, according to Drewry. 

The maritime consultant said the sector would see “strengthening rates through 2019 fuelled by rising project cargo traffic, but prospects thereafter are muted by an anticipated slowdown in world trade”. 

Acknowledging that the trade dispute between the US and China appeared to be “moving toward some kind of a truce”, it added that the global economic outlook had deteriorated, and “continued uncertainty in Europe due to Brexit suggests that multipurpose shipping is not out of the woods yet”. 

Author of the report, Drewry’s senior analyst, multipurpose & breakbulk shipping, Susan Oatway, said: “It is also the case that the project market is expected to be strong in 2019 as it was boosted by the rise in oil prices through the first half of 2018.”  

She added, however, that over the longer term, oil prices were expected to average at below $70 a barrel, which would “limit new project investments”. 

On the supply equation, Drewry said the number of MPVs with a heavylift capacity of less than 100 tons was in decline, and it expected this trend would “continue in the foreseeable future”, predicting a contraction of almost 3% a year in capacity through to 2023. 

In contrast, the project cargo fleet with a lift capability of 100 tons or more is growing at a rate of almost 2% a year, with most newbuild deliveries in that category. 

As in past years, the prospects for the MPV sector are also linked to the respective health of other shipping sectors, such as handy bulk carriers and containerships.  Ms Oatway told The Loadstar: “Growth in the MPV market is always tempered by the competing markets. In particular, the strength of any recovery over 2019, will depend on the recovery in the container market and how the US/China trade war plays out. A firm conclusion there will prompt growth in the general cargo sector and give the lines more financial incentive to stick to their more traditional cargoes, rather than pushing further into breakbulk and project cargo.”

The report added: “In the short term, the MPV share is expected to improve as the competition moves back to its traditional cargo base. However, as general cargo demand weakens over the longer term, with slowing economic and trade growth, it is anticipated that these competing sectors with their own oversupply challenges will return to breakbulk and project cargo and so stagnate MPVs market share.”  

An analysis of the top 10 multipurpose operators last month by Dynamar, publisher of Dynaliner, showed Germany’s BBC Chartering had regained its number-one position, with a fleet of 144 ships for a total deadweight of 1.84m tons, from Cosco Shipping Specialized Carriers, which operates a fleet of 67 vessels for a total deadweight of 1.82m tons.  

Third-ranked in the Dynamar table is Dutch group Spliethoff, which notably bought nine ships from defunct Hansa Heavy Lift and has 52 vessels for a deadweight of 834,000 tons. Spliethoff also has the biggest orderbook in the sector, with six ships being delivered with an average deadweight of 18,000 tons. 

The top ten carriers in the MPV sector have a combined deployed fleet of 476 ships with a total deadweight of 8.2m tons.  The Chinese/Polish Chipolbrok has the highest average crane capacity, with 590 tons. 

Elsewhere, global forwarding giant DHL has launched a digital Subcontractor Management Programme for its deepsea chartering and heavylift cargo projects sector to identify the best suppliers for its customers via accumulating data on the performance of its key subcontractors.