Multipurpose shipping sector unlikely to recover before '18: Drewry
THE struggling multipurpose shipping sector is expected to continue facing competition from the container and handy-sized bulk sectors until 2018, despite recent increases in container and dry bulk freight rates, Drewry said in its latest Multipurpose Shipping Market Review and Forecaster report.
"Whilst there has been a brief upturn in container rates, it is likely to be short lived and not significant enough to take the lines away from the breakbulk sector," the report said.
The Baltic Dry Index of bulk freight rates, which has fallen to record lows below 300 points, briefly moved back 1,000 points at the end of August, but Drewry does not anticipate an upturn in the dry cargo trade during the forecast period, reported IHS Media.
The report echoed a prediction by senior analyst Susan Oatway at the London-based consultancy, who said last month that the multipurpose sector is unlikely to recover until 2018. Ms Oatway blamed overcapacity, tepid demand, and stiff competition from container and dry-bulk operators that also are suffering heavy losses.
"The last three months have been some of the worst the multipurpose and project sector has endured in living memory ... with little suggestion that volumes will improve significantly until the end of 2017," the Drewry report said.
Rates have continued to slide and are barely covering operating costs as the rival container and bulk shipping sectors have moved into the breakbulk market to fill their under-utilised vessels.
"We are more pessimistic about the near term outlook than we were six months ago but we can see recovery for this sector, albeit some way off," Ms Oatway said.
The multipurpose sector's market share is expected to decrease by one per cent a year from 2015 through 2020. "The main problem remains the competing sectors, particularly container shipping where aggressive pricing is drawing cargo away from MPV ships," said Ms Oatway.
THE struggling multipurpose shipping sector is expected to continue facing competition from the container and handy-sized bulk sectors until 2018, despite recent increases in container and dry bulk freight rates, Drewry said in its latest Multipurpose Shipping Market Review and Forecaster report.
"Whilst there has been a brief upturn in container rates, it is likely to be short lived and not significant enough to take the lines away from the breakbulk sector," the report said.
The Baltic Dry Index of bulk freight rates, which has fallen to record lows below 300 points, briefly moved back 1,000 points at the end of August, but Drewry does not anticipate an upturn in the dry cargo trade during the forecast period, reported IHS Media.
The report echoed a prediction by senior analyst Susan Oatway at the London-based consultancy, who said last month that the multipurpose sector is unlikely to recover until 2018. Ms Oatway blamed overcapacity, tepid demand, and stiff competition from container and dry-bulk operators that also are suffering heavy losses.
"The last three months have been some of the worst the multipurpose and project sector has endured in living memory ... with little suggestion that volumes will improve significantly until the end of 2017," the Drewry report said.
Rates have continued to slide and are barely covering operating costs as the rival container and bulk shipping sectors have moved into the breakbulk market to fill their under-utilised vessels.
"We are more pessimistic about the near term outlook than we were six months ago but we can see recovery for this sector, albeit some way off," Ms Oatway said.
The multipurpose sector's market share is expected to decrease by one per cent a year from 2015 through 2020. "The main problem remains the competing sectors, particularly container shipping where aggressive pricing is drawing cargo away from MPV ships," said Ms Oatway.