Ulrichs: Fine-tune Your Forecasting
Ulrich Ulrichs, CEO, BBC Chartering
We expect the heavy-lift and multipurpose market to remain very strong in 2022 with demand outnumbering supply due to a variety of factors, including surging container volumes, the pandemic, and the fleet structure.
One currently and prominently observed phenomenon is container “hype” – directly or indirectly driven by a sustained increase in consumer spending – which will continue to influence the multipurpose market throughout the course of 2022.
Needless to say, the demand for container capacity is contributing to the lack of MPV tonnage. Multipurpose vessels continue to be chartered out to container carriers and MPV carriers are carrying high-paying containerized cargoes.
The Covid pandemic has induced a lot of factors that have disrupted global supply chains. These include terminal lockdowns, quarantine of crew/vessels, slow productivity in ports and congestion, among others. Those factors are not likely to be resolved before the second half of 2022 at the earliest.
Also, there are a few underlying issues which are influencing the multipurpose sector from within. Demand for transportation requirements, especially with regards to renewable energy cargoes, remains high. The MPV fleet is in general overaged and there are hardly any newbuildings to be delivered in the coming 2-3 years. In addition to that, additional environmental regulations such as ballast water treatment systems, EEXI (Energy Efficiency Existing Ship Index), and CII (Carbon Intensity Indicator) will take capacity out of the market, either due to required dry-dockings or as a result of slow steaming. This will add cost for owners and operators, costs that must be passed on to customers.
Space will remain at a premium and freight rates will continue to stay at high levels. Lead times increased from two to three weeks in February 2021 to two to three months in September 2021. Time charter rates for MPV/heavy-lift vessels more than doubled between Q1 and Q3 2021.
Shippers are advised to fine-tune their forecasting and keep in close and regular contact with their carriers in order to secure the space and capacity they require in 2022.
