Industry Leaders Strike Cautious but Confident Outlook for Months Ahead
By Amy McLellan
Geopolitics were hard to escape at Breakbulk Americas, with senior voices from across the industry agreeing that the ability to take faster, riskier and more strategic decisions in the face of uncertainty will be key to success.
In an aptly named session, Weathering the Storm: What’s Next for Breakbulk Carriers?, moderated by Yorck Niclas Prehm, head of research at Toepfer Transport, senior leaders stressed the importance of expecting the unexpected, be it war, tariffs or market-shocking tweets.
“There’s a lot of uncertainty in the world,” said Vedran Muratbegovic, SVP, Industrial at Wallenius Wilhelmsen, addressing the impact of Washington’s new — and still unsettled — tariff regime. “It’s impacted us greatly because sourcing shifts happen and that then impacts our network, so it requires us to be flexible and agile.”
The conflict in the Middle East, which has effectively put the Suez Canal off limits, is another storm cloud. Not only have trade routes shifted to avoid the Red Sea conflict zone but the resulting impact on fleet capacity makes forward planning harder. With longer transit times round the Cape continuing to soak up excess tonnage, the decision to invest in new capacity is a harder call.
“It’s anyone’s guess when the Suez Canal will open again but when it does, it will have a significant impact on capacity,” said Henrik Hansen, general manager of AAL Americas.
For some in the industry, however, talk of oversupply and the impact on rates misses the point that there’s a need for excess tonnage in order to meet customer demands in a volatile world.
“The additional tonnage gives us a degree of flexibility to adjust to the market as needed,” said Ben Collins, global project cargo manager at MSC. He pointed out that along with customer demand for breakbulk capacity, there are also supply-side bottlenecks that can only be solved by having flex in the system.
“Congestion, congestion, congestion is one of the biggest challenges facing carriers right now,” said Collins. “Carriers across all sectors are losing a lot of time in and around the ports. The time to get alongside the berth is increasingly a problem and there’s no short-term solution to this, particularly as environmental regulations mean options that previously existed, such as speeding up the ship, are no longer available to us.”
Environmental rules continue to shape the industry, from ship design to route planning to the timing of investment decisions. Here, again, carriers are being asked to weather uncertainty without clear answers on which fuels will prove affordable and scalable to meet demand.
“There’s a lot of work to be done but we cannot wait for perfection, we have to take action today,” said Collins.
Muratbegovic agreed, pointing out that time is ticking down if decarbonization goals are to be met. “2050 sounds like it’s way out in the future but from a technology perspective, it’s just around the corner,” he said.
Carriers are already taking bets on the fuels of the future, with dship Carriers taking delivery of three new methanol-ready ships, with four more on order. It’s not just carbon rules that are driving newbuild design programs.
“Our inhouse design is based on listening to the needs of our customers, who want more volume and more on deck capacity, as well as being ice-class and certified to sail with open hatches,” explained Dea Chincuanco, president of dship Carriers Americas.
A newbuild program has also been underway at AAL Shipping, with the last of its 32,000-deadweight tonnage (dwt) Super B Class heavy-lift MPV due for delivery in summer next year. The design was in response to customer needs and their requirements to handle bigger and heavier loads, said Henrik Hansen, general manager of AAL Americas.
“It was also an opportunity for us to try and explore new cargo segments we’d not been able to approach before in an active manner,” said Hansen.
Despite the storm clouds of uncertainty, speakers were unified in agreeing the outlook for the sector is positive. “There will be challenges, but that’s nothing new,” said Hansen, “but in the short term the outlook is promising.”
Collins of MSC concurred. “It’s full steam ahead for us,” he said. “The mood music in the industry is pretty positive but tempered with a little bit of caution.”
Chincuanco agreed with the cautious optimism. “While there have been some delays to projects, if you look at the lag from this year and what’s projected next year, then we are all going to be very busy.”
The next event in the calendar is Breakbulk Middle East on 4-5 February at the Dubai World Trade Center. Secure your stand for the region’s leading event for the breakbulk and project cargo sector.
Top photo: Yorck Niclas Prehm and Dea Chincuanco. Credit: Marco Wang Photography
Second: Dea Chincuanco and Vedran Muratbegovic. Credit: Marco Wang Photography
Third: Ben Collins and Henrik Hansen. Credit: Marco Wang Photography