Drewry: Breakbulk shipping to remain under pressure in 2016

Carriers will face continued competition from operators of both container and handy-size bulk ships, according to the London-based ship consultant’s latest Multipurpose Shipping Market Review and Forecaster report.    The breakbulk shipping sector will remain under pressure in 2016 even through demand is expected to rise and supply growth will be minimal, said the London-based ship consultants Drewry in the latest edition of its Multipurpose Shipping Market Review and Forecaster report.
   “We expect further container shipping penetration into the project market and handy bulk carrier penetration into the breakbulk sectors. These factors will result in reduced market share for the multipurpose shipping fleet,” explained Susan Oatway, senior associate at Drewry. “Our view is that improvement in this sector is still some way off. Overcapacity coupled with low freight rates is still a challenge for the profitability of dry bulk and container shipping sectors, and this is increasing their competition for both project and breakbulk cargoes.”
   “While demand is growing (dry cargo demand is expected to reach average annual growth of 3% in the period to 2018) due to competition from other shipping sectors, the multipurpose fleet share is only expected to reach average annual growth of 1.4% over the same period,” said Drewry.
    The company adds “the project carrier fleet is growing at a much faster rate than the simpler multipurpose fleet and vessel technology is improving every year, whether in terms of lift capacity or design. This sector’s ability to innovate, for example with the recent delivery of vessels equipped with DP (dynamic positioning) systems, will be critical to its future in the face of continuing market share erosion of conventional commodities.”