Breakbulk carriers

Roughly one-third of the multipurpose and heavy-lift fleet is in position to be scrapped, while the industry demands larger vessels and carriers weigh which type of fuel will rule the day.

The shipping industry is facing a prolonged period of geopolitical instability, attendees at the Journal of Commerce’s Breakbulk & Project Cargo Conference were told Thursday.

The global energy buildout in renewables and oil and gas has spurred the heavy-transport partners to order two new carriers.

Toepfer Transport says improving demand and the ongoing threat to shipping caused by the Houthi militant attacks in the Red Sea region have boosted fleet utilization.

With the busiest roll-on/roll-off (ro/ro) port in the US closed to ship traffic, automobile manufacturers and ro/ro carriers are shifting to alternative ports.

The cost of moving flatbed loads from Baltimore to warehouses in western Maryland jumped more than $100 per load compared with February’s average cost, according to data from DAT Freight & Analytics.

Oil and gas supply chains are in jeopardy as the government of Equatorial Guinea announces that it plans to nationalize a major port asset owned by Netherlands-based UAL Group.

Tougher environmental rules are expected to drive more MPV scrapping even as the order book expands thanks to new MPV and open-hatch ship orders.

New orders for open-hatch multi-purpose ships, some of them heavy-lift capable, have increased the MPV fleet growth forecast by 3.5% through 2028.

Billions of dollars in federal funds are available to scale up innovative green energy projects, once would-be developers make it through the DOE’s loan qualification process.

Mode-malleable breakbulk cargo is shifting back to containers even as disruptions threaten to squeeze capacity and drive container rates higher.

The multipurpose sector is managing security risk, dodging pricey transit fees at the Panama Canal and finding new cargo sources as route diversions globally become routine.

Vessel diversions and potential tariffs complicate the outlook, but strong forward contracting fueled by booming demand is bolstering the ro/ro sector after a strong 2023.

Multipurpose/heavy-lift carriers share concerns over the uncertainty caused by geopolitical events but see longer-term promise thanks to the slow-moving green energy boom.

The MPV spot market is increasingly busy even as high interest rates and supply chain bottlenecks hold back capitol project execution, analysts and industry executives say.

Heavy-lift and semi-submersible owner/operator Harren Group is expanding its fleet with a mix of long-term charters and up to six newbuildings.

With capacity restricted, global MPV/HL rates are expected to rise again starting in the second quarter of 2024.

Existing wind-related manufacturing capacity in the US struggles to meet the local content requirements of the measure, frustrating would-be developers and pushing away some early investors.

Multipurpose and heavy-lift and ro/ro carriers are weighing whether to pass on the costs of EU emissions allowances by using surcharges or all-in freight rates.

Voyage diversions needed to avoid Panama Canal drought restrictions and the increasingly risky Red Sea route will remove multipurpose and heavy-lift capacity from the global fleet, which in turn is likely to slow the rate slide seen during 2023, analysts say.

Although carriers and project forwarders have seen lower wind volumes in some markets this year, the slowdown is bringing the US wind buildout to a more realistic level, stakeholders say.

Hyundai Glovis has teamed up with HMM and Seaspan to spend almost $1.5 billion on new dual-fuel pure car and truck carriers as demand continues to surge in the ro/ro sector.

Low water restrictions and “exorbitant” costs for rare transit slots through the drought-hit waterway mean tramp breakbulk and heavy-lift carriers must use longer ocean routes, thus increasing voyage costs.

The service was previously operated on an ad hoc basis but is being upgraded due to growing demand for breakbulk and project cargo into the US West Coast to avoid restrictions and delays through the drought-hit waterway.

While long-term optimism supports the MPV market, industry analysts see short-term divergence in time charter rate averages.

The aim of the venture is to broaden the scope of the companies’ current operations, both geographically and in vessel size.

The phased reduction in the number of transits coincides with peak banana exports from Ecuador and the start of the deciduous fruit season in the southern hemisphere.

Commodity prices continue to rise, leading to further investments in mining, agriculture and oil and gas projects, all of which is good news for breakbulk and project shippers and their service providers.

Although there is little evidence that EVs are a greater fire hazard aboard ro/ro ships than traditional internal combustion vehicles, carriers are ramping up their safety measures.

The funding shortage for breakbulk port facilities will create severe constraints on both cargo owners and vessel operators as offshore wind construction accelerates and new types of energy projects are developed.

Multipurpose owners and operators are growing increasingly wary of the breakbulk market’s downward trend as cargoes remain hard to find and the wind energy market falters.

Toepfer’s multipurpose index has maintained its downward momentum due partly to a delay in the emergence of wind cargoes, while Drewry’s index showed some signs of life following a summer dip.

MPV newbuildings are being designed for higher cargo intake and improved efficiency, but any consensus on green fuels and propulsion systems remains elusive.

Affiliated carriers Intermarine and Jumbo-SAL-Alliance are poised to reap new cargo from the expected growth boom in South American mining, green fuels and wind.

Despite having fewer cargoes for which to compete, some bulk operators are beefing up their staff of project cargo specialists, implying that those carriers are sensing opportunities ahead.

Newbuilding investments in the multipurpose and heavy-lift fleet will be crucial to the global push to decarbonize energy.

Breakbulk carriers and their clients must prepare for the EUs new emissions trading system before the Jan. 1 start

Weak construction and manufacturing demand, inflation fears and continued economic uncertainty are weighing on global steel volumes, a key commodity for multipurpose vessels.

Although the multipurpose vessel market is expected to further soften on weak charter activity in the third quarter, firmer demand is expected by the end of the year, keeping certain sectors of the market — mainly, project carriers — optimistic, analysts said.

Expected demand for wind cargo, among other factors, is still driving underlying optimism in the MPV sector, but a wind turbine tech “arms race” could cast a long shadow.