Breakbulk carriers

Breakbulk and project cargo industry stakeholders must take note of the far-reaching potential ramifications of the recently reintroduced US SHIPS Act, writes Associate Editor Carly Fields.

The Denmark-based carrier has been growing its multipurpose vessel fleet since entering the project cargo sector with the acquisition of Thorco Projects in 2023.

A slip in a key sentiment index reveals the MPV sector’s vulnerability to general market uncertainty, but operators remain optimistic that the cargo pipeline is still robust.

A divergence from the weakening container sector has seen the MPV trade hold steady, although the potential for a breakbulk cargo grab by container lines cannot be discounted.

A swing from renewables to fossil fuels in the US and new opportunities for wind cargoes internationally could overhaul traditional MPV trade lanes over time.

The issue of transit time variability in Latin America has downstream impacts for projects, with forwarders often having to get creative to figure out workarounds due to unforeseen delays.

Rather than shift sourcing, some shippers are negotiating with suppliers to share the costs of increased US import tariffs, an international trade attorney told the Journal of Commerce’s Breakbulk and Project Cargo Conference.

The unknowns surrounding US tariffs and proposed fees on Chinese tonnage are forcing shipowners to take a wait-and-see approach to ordering new vessels.

Speakers at the conference in New Orleans agreed that recent volatility has yet to significantly slow projects or investments in the project cargo sector.

US maritime regulators’ decision to add the multipurpose vessel operator to the controlled-carrier list comes amid a wider US-China trade dispute.

Carriers in the specialized cargo sector are designing contracts that would shift the cost of the US’ possible tax on Chinese tonnage to heavy-lift and project cargo shippers.

Ongoing market uncertainty is expected to upend rates as the breakbulk sector continues to digest tariff ramifications on the specialized sector.

The expansion of the semi-submersible and deck carrier fleet comes amid a forecast rebound in offshore markets, with $46 billion worth of oil and gas EPC contracts anticipated this year and $52 billion in 2026.

Automakers could be hit with compensation claims if they are unable to fulfill seaborne carrier contracts amid an expected downturn in US volumes.

MPV industry experts call for exemptions to US port taxes for China-built ships, stressing the lack of alternatives for specialist cargo carriage and the unfair burden on responsibility on the sector.

Freight rate declines coupled with ship supply and cargo demand worries are rippling through the MPV sector.

Engineering, procurement and construction companies are in a tailspin about the possible withdrawal of suitable ships for project cargoes if the US government’s port call proposal linked to Chinese tonnage is implemented.

While the breakbulk sector failed to capitalize on the forward loading of steel to get in front of US import tariffs, it now has bigger concerns with US proposals to penalize Chinese-made MPVs.

The threat of US tariffs, inflation, rising government borrowing and slower interest rate cuts are undermining cargo confidence in the US and beyond, according to benchmark indicators.

Investment in wind power and air lubrication gives multipurpose vessel operators an extra shot at compliance with the FuelEU emissions rules.

Unstructured data, security concerns and value questions are holding back the progression of technology in the breakbulk industry.

Shipowners in the sector view the ambitious SHIPS for America legislation as unrealistic, with the domestic shipbuilding industry under-skilled and lacking the capacity needed to meaningfully contribute to the specialized MPV fleet.

Forwarders say that breakbulk and project cargo shippers are taking a greater interest in alternative fuel options for specialist ships.

The breakbulk sector can lean on the progress of key US ports in facilitating the safe bunkering of next generation alternative shipping fuels

The shipowner’s decision to expand its MPV fleet is underpinned by expected growth in project cargo volumes and a lack of suitable ships.

The project, expected to drive further investment at Europe’s second-busiest port, is the largest investment in Europe’s chemical industry in more than 20 years.

US energy and climate regulations and policies are expected to shift with the incoming Trump administration, although the magnitude of that shift is still unknown.

Increased orders and decreased recycling in 2024 helped capacity, but the volumes are still not where they need to be to balance the MPV fleet.

Outside investment for project carriers is scarce, primarily because future project cargo flows are so difficult to predict.

Steady-but-uninspiring demand for MPVs has kept freight rates at a sustainable level.

Industrial projects reliant on imported steel are expected to feel the pinch of an import and quality crackdown in the country.

A decline in sales of high-and-heavy equipment for the bellwether roll-on/roll-off cargo providers will reduce demand for breakbulk carriers.

MPV operators are hopeful the incoming Trump administration will build on Biden’s support for nuclear power generation, which would boost cargo volumes.

The Ships for America Act and national security spotlight seen as growth opportunities for US-flag commercial fleet.

Minimal movements in industry indexes underline a constant demand for MPVs with capacity artificially reduced by Red Sea diversions.

Healthy demand for “sophisticated” multipurpose vessels is being undercut by a sluggish market for standard MPVs.

A 10-ship order and the acquisition of MPV carrier ForestWave will increase Spliethoff’s fleet to 155 ships by 2029.

The record order book for car carriers comes amid forecasts of falling global production of light vehicles, a key driver of roll-on/roll-off vessel demand.

Should a strike occur — and if it continues for an extended period — one possible outcome is the spillover of container cargo into breakbulk vessels, similar to the scenario that played out in response to supply chain bottlenecks during the pandemic.

The MPV sector is seeing a period of stability in charter rates and cargo demand after a period of intense routing disruptions linked to the militant attacks on commercial shipping in the Red Sea.