Tariffs, Tensions and New Opportunities

By Simon West

Kicking off our special carrier section from Issue 3, 2025 of Breakbulk Magazine, executives from BBC Chartering, AAL Shipping and Chipolbrok respond to questions on the sector’s biggest challenges and emerging opportunities – from geopolitical tensions and U.S. tariffs to project cargo prospects and fleet dynamics.

(8-minute read)

1. How would you describe the current state of the shipping market, and what strategies is your company implementing to maintain and grow its market share in this competitive environment?

Ulrich Ulrichs, CEO, BBC Chartering: The market remains generally strong, but political and economic uncertainties make it increasingly unpredictable for the rest of the year. Despite the arrival of new tonnage, BBC Chartering’s fleet will remain very stable in the coming years due to the newbuildings ordered: 15 LakerMax vessels and a total of 10 F500 vessels to be delivered by the end of 2026. Older tonnage will be phased out in the coming years. Therefore, we expect to at least maintain, if not expand, our market position.

Kyriacos Panayides, managing director, AAL Shipping: We could describe the multipurpose, heavy-lift shipping market as a sturdy ship navigating stormy seas. Unpredictable – external – events are creating choppy waters and certainly contributing to the uncertainty, yet the market fundamentals remain strong. It is somewhat paradoxical that despite the geopolitical landscape we operate in, we are enjoying a period of relative stability in rates – for the first time in a long time – buoyed by the healthy supply and demand balance, something we need to protect to avoid mistakes of the past.

In situations such as these, it is important to remain agile, adaptable and focused on our core competencies: serving our customers with regular and trustworthy services and highly capable tonnage. We laid the foundations of maintaining our position and growing in the market several years ago when we expanded our trade route coverage, operating regular and dependable sailings across them, and designed and ordered our Super B-Class fleet. The latter has not only expanded our tonnage offering overall but also bolstered our cargo intake capability to serve existing industry sectors and exciting new ones.

Janusz Kuzmicki, shipping director, Chipolbrok: The market is in fairly good condition with big projects, especially related to the energy sector with cargo being shipped from the Far East to the Middle East, Europe, South America or Australia. Chipolbrok focuses on two main aspects for growth: vessels (in 2025-2027, six newbuildings will be delivered) and local presence (opening offices in key hubs/markets such as Dubai).

Some of these ships are ordered to replace part of aging tonnage – four Orkan class vessels built in 2003/2004. Other big vessels like the 62,000-deadweight tonnage (DWT) series geared with heavy cranes 2x150 ton (Gemini 300 ton) and substantial deadweight cargo capacity (DWCC) are used not only for big projects generated out of the Far East but also as a competitive possibility of bringing Supramax size of bulk shipments out of the regions. With our fleet number and long-haul intercontinental trades we need a wider choice of available tonnage size that also grants flexibility in line with shipment volume and required destinations.

2. Which industries do you expect to drive the most project cargo demand over the next decade?

Ulrichs: The primary demand drivers remain oil and gas-related industry projects, as well as renewables. Additionally, mining and infrastructure are expected to exhibit healthy and steady demand.

Panayides: As industries continue to evolve, we are seeing positive indicators across a broad range of sectors, including oil and gas, mining, renewable energy, and infrastructure. Of course, renewable energy – particularly offshore wind energy – is a significant area of growth, but many regions are opting for a diversified approach to their energy mix, with continued investments in the oil and gas sector. Under both segments we see the construction of new projects as well as the refurbishment of existing assets.

The latter forms part of a concerted effort in the oil and gas sector to upgrade existing plants as sustainability becomes an increasing priority. Over the next decade, we will continue to encourage partners to engage us earlier in the project lifecycle. This strategy of early planning and complete transparency is paying dividends for everyone in the supply chain.

Kuzmicki: Wind farms and the energy sector as a whole will definitely remain a key part of shipments in the multipurpose segment over the next decade. This green revolution and new approach to cheaper sources of energy is a long-term process that has created big industry, and this industry needs specialized tonnage able to carry long blades, heavy nacelles and hubs. Chipolbrok is also constantly involved in shipments for other energy sectors such as liquified natural gas (LNG) plants, modern gas-fired power plants and more traditional energy generating units. The world definitely needs a mix of energy sources, especially now in this transition period from older carbon emissions technology to modern and environmentally friendly energy sources.

3. With wind energy components increasing in size and weight, what challenges does this pose for project cargo logistics? Are current wind blades too big for ships – or will they soon be?

Ulrichs: We at BBC Chartering will focus on onshore wind energy components. Offshore equipment is, or will become, too heavy and large for our vessels. We will not enter the offshore wind market and will, for the time being, not invest in super heavy-lift vessels.

Panayides: Wind energy cargoes of all types are increasing in size, but the components of offshore wind farms are posing the greater challenges for operators. While not the heaviest components handled on our vessels, the challenge with the increasing dimensions lies within the ability to transport multiple sets of wind turbines on one sailing to achieve economies of scale. However, this trend has been ongoing for many years now and is something we have prepared for with our adaptive fleet profile and our newbuild Super B-Class vessels. These vessels have been designed to address the energy needs of the future and are therefore able to accommodate large quantities of wind energy cargoes on one sailing, while the 150 m-long deck space is well-suited for turbine blades for offshore wind projects.

Kuzmicki: The longest blade shipped by Chipolbrok was 91m long and for sure this will increase in the foreseeable future. The main issue with the increasing size of windmill components is related to vessel’s intake capacity – if less blades can be taken then higher transport prices will be paid and more vessels will be needed on the market to fulfill demand. Building new vessels now is not an easy task, therefore this could lead further to a bigger gap between demand for vessel space and supply thus increasing transport prices again. We are adjusting our fleet size and deck carrying capacity in order to meet these new developments and demand. Our new ships will be offering big and unobstructed deck space for long blades exceeding 100 meters in length, which we can also load in more layers without limiting navigation visibility. Our operations are now more often constrained by the consignees’ ability to promptly receive the cargo for direct delivery, or by the limited availability of sufficiently large storage areas at ports when delivery to the final installation site is delayed.

4. How are geopolitical tensions, such as the Red Sea crisis and the war in Ukraine, affecting the logistics and planning of transporting project cargo? If Europe builds up its military and related infrastructure, does that present opportunities for the industry?

Ulrichs: Transportation planning is primarily influenced by “sudden” changes. Unfortunately, the industry has become accustomed to the Red Sea crisis and the war in Ukraine, so the effects are now limited. Only the trades between the Mediterranean and the Persian Gulf, and vice versa, are still affected due to some carriers continuing to transit the Red Sea. The proposals and decisions made by the Trump administration are also a concern, especially if implemented on short notice. We expect the buildup of military and infrastructure in Europe to have only a limited impact on the project industry, particularly for MPP and heavy-lift carriers. A more positive economic development in Europe would be more beneficial for our industry.

Panayides: Geopolitical issues, such as the Red Sea crisis and the war in Ukraine, have undoubtedly created market uncertainty and posed significant threats to commercial shipping and the safety of our seafarers. However, three years into the war in Ukraine and nearly a year and a half since the onset of issues in the Red Sea, we have adapted. After the initial shockwaves, robust safety strategies have been put in place and the market has adjusted as we always do. While these challenges have led to heightened costs and logistical complexities, the shipping sector is resilient. Despite these residual effects, cargo continues to move, demonstrating the industry’s ability to navigate turbulent conditions and maintain operations.

Kuzmicki: The Red Sea crisis has significantly affected our shipping routes, leading us to schedule more ships via the Cape of Good Hope. This decision was driven not only by the need to ensure the safety of our vessels and crew but also by the requirements of shippers and charterers who are either unable to arrange sufficient insurance or unwilling to accept unpredictable risks when delivering cargoes worth millions. This routing extends voyage times and involves extra costs for us, but on the other side we are not paying expensive Suez Canal charges. As a majority of multipurpose carriers decided to choose this longer way via the Cape of Good Hope, it has resulted in a reduced number of available ships and increased freight rates. The war in Ukraine has had a less direct impact on our operations, aside from a significant drop in bulk cargoes and fertilizers of Russian origin. However, this has been replaced by other bulk commodities, which we use to reposition our large vessels to Asia when largescale projects are not available. The expansion of the military industry is unlikely to generate significant additional shipments for multipurpose vessels, as most of the new production facilities in Europe will likely be supplied by local industries and manufacturers.

5. The U.S. plans to impose million-dollar fees on Chinese-built or operated vessels at its ports. How could this impact global shipping and supply chains? Do you foresee carriers adjusting fleet composition or rerouting cargo in response?

Ulrichs: The impact would be significant across all shipping segments, including MPP, tankers, containers, bulk and roll-on, roll-off (RoRo). Adjusting the fleet composition would take at least a decade, and yes, cargoes would be rerouted, or certain trades might come to a halt. This would affect carriers globally, as well as service providers, terminals, stevedores, and, not to forget, customers in the U.S. and beyond.

Panayides: It is difficult to comment on any tariffs that have not come into force and on a playing field where goalposts seem to move with frequency. However, if it does move ahead, this policy will disturb ocean trade with the U.S. and some shipping segments will be harder hit than others. For multipurpose and project carriers, it is estimated that more than 80% of the global fleet has been built in China and almost the entirety of the current orderbook is with Chinese yards. It is likely that this policy, if it comes into effect, will also reduce traffic at smaller U.S. ports around the major gateways, as operators will have to minimize the number of U.S. calls and will be forced to consolidate trade with the bigger ports. This in turn could create chaos at the larger ports, with congestion, limited terminal or shore space to store big volumes of cargo and other incidental costs, shifting the freight levels of shippers and consignees to record high levels. Considering all the repercussions, one would predict that inflation will also rise to record levels.

Kuzmicki: 73% of the global project carrier fleet is built in China – 89% if you consider only vessels that are 15 years old or newer. In the case that fees are implemented, costs for any project shipped to China will significantly increase as all owners will want to simply shift 100% of these fees to customers. However, it is not possible to adjust fleet composition in the short term, and even rerouting vessels to other geographical areas will leave a minimal number of ships running the U.S. service. This will again increase freights for customers due to the lack of competition. If we factor in the new import tariffs just declared by U.S., then I’m afraid it does not look good for the country’s future business development. I believe the world in some way will adapt to this new situation, but it is hard to predict how the expected domino effect in rising trade barriers will change the worldwide economy.

6. Do you expect to see any immediate shifts in trade routes or cargo volumes in response to the tariffs imposed by the Trump administration? What challenges do these tariffs pose for ocean carriers?

Ulrichs: The project industry will only feel the impact of the tariffs with some delay, despite tariffs certainly also being valid for projects already progressing. Projects typically span longer timeframes, and the procurement and production of components for projects often have lead times of several years. Will there be rerouting of cargo? Probably in the medium to long term. But initially the biggest impact will be on the price tag for those behind a project.

Panayides: We have already seen the negative impact on the global economy from the recent tariffs announced in early April, with stock markets falling. While there has been little impact thus far to our immediate operations, as fixtures are booked many months in advance, this new protectionist approach certainly does pose a threat to shipping and global trade in general. For AAL, we have had our own office and network in the USA for over a decade and a community of customers that rely on our regular and reliable services. We may only hope that at some stage – and hopefully soon – the consequences of such policy to the U.S. consumers and U.S. economy will convince the new administration to reconsider this approach.

Kuzmicki: It is hard to measure the impact of these new tariffs on trade, but it is certain that U.S. business partners will need to calculate whether the new costs justify moving forward with certain projects, whether additional budget can be secured to complete ongoing contracts, or if it would make more sense to pause or cancel altogether. Chipolbrok has been running a service to the U.S. for a long time, and it has always been an important route for our project cargo activity. We are therefore concerned about the future, but if needed, our vessels will be redirected to other areas. All in all, we can expect stronger competition and new scheduling initiatives. I fear we are entering difficult times as the fundamental rules of global trade have been deeply changed. Trade restrictions and new barriers consistently have a negative impact on the shipping industry, as our vessels are intended to bridge distances and facilitate global business relations.

Join Ulrichs, Panayides and other industry leaders for a panel session on “Future-Proofing Heavy-Lift and MPV Fleet Capacity” at Breakbulk Europe 2025. The session will take place on the main stage at Rotterdam Ahoy on Wednesday, 14 May at 11:00-11:45.

TOP PHOTO: BBC Pearl arriving in Cape Town. CREDIT: BBC Chartering.
SECOND: Chipolbrok’s 61,700 dwt multi-purpose vessel, Herbert. Credit Chipolbrok
THIRD: The A-Class vessel AAL Newcastle transports wind blades. Credit AAL Shipping