Interesting times

Interesting times

This is a great time to be in shipping, any kind of shipping. Demand is high and vessel capacity tight almost everywhere. And while container and bulk volumes and rates attract most of the attention, the breakbulk market also remains healthy.

That's good news for vessel operators and charterers, and not so good for shippers of breakbulk cargoes. However, even shippers aren't complaining too much. Economic and political developments are boosting demand for noncontainerized shipments of oilfield supplies, power-generating equipment, steel, forest products and foodstuffs.

Breakbulk shipping is a diverse market, occupying the broad middle ground between containers and bulk. Breakbulk's accepted definition encompasses virtually any general cargo that does not move in liquid or bulk form or in containers.

As Peter Leach's cover article points out in this special supplement to The Journal of Commerce, breakbulk rates softened slightly during the summer, but the decline has been modest in comparison with the steep drop in rates for dry-bulk shipping. "Specialized 'tweendeckers and heavy-lift cargo vessels are in short supply," notes Charles Measter, president of MAP Logistics, a ship-broking and consulting firm in New Canaan, Conn.

Capacity of roll-on, roll-off ships, which now move a substantial share of traditional breakbulk cargoes as well as vehicles, continues to struggle to keep up with rising demand. Infrastructure projects, many of which are in regions far from manufacturing centers, are fueling demand for construction and agricultural equipment, and for construction materials and components.

Executives at ro-ro carriers such as Wallenius Wilhelmsen and HUAL note that shipyards are booked solid, and that a specialized ro-ro ship ordered today probably cannot be delivered for another three years or so.

Demand for shipments of refrigerated cargoes also remains strong. Much of this business now moves in containers, and the supply of all-reefer vessels continues to decline. That requires new approaches for many high-volume shippers of perishables.

Charter rates for airfreight shipments of project cargo are at record highs. Demand is strong for these shipments, many of which are for rush jobs in remote locations, and the supply of jumbo airfreighters remains tight.

If all of this wasn't enough, there's more. Beginning Sept. 16, new international rules will require dunnage or other wooden packing material to be certified as having been fumigated or heat-treated to kill tree-destroying pests such as the Asian longhorned beetle.

Who says breakbulk isn't an interesting market?

Joseph Bonney is editor of The Journal of Commerce. He can be contacted at (973) 848-7139, or at jbonney@joc.com.