Drewry’s latest Multipurpose Shipping Market Review and Forecaster report anticipates better times ahead for the sector following a tough 2013. Last year cargo demand for multipurpose and heavylift vessels was adversely impacted by determined competition from other shipping sectors.

While cargo demand has risen steadily since the crash of 2009, the multipurpose sector share of those volumes has eroded. Drewry reckons that 2013 was in fact a worse year for ship owners than recession blighted 2009, as its market share dropped to just 8% of dry cargo, although tonnage was actually higher.

The biggest growth in 2013 volumes came, not surprisingly, from minor bulks, consisting primarily of steel and forest products. Global steel production in 2013 exceeded 1.6 billion tonnes, with growth of almost 5% compared to 2012. Whilst some major exporters (South Korea, EU, USA) reported decreased exports over 2012, China and Taiwan continued to show strong growth (18% and 9% respectively) which contributed to an expansion in overall global traffic. By contrast, demand for general cargo, which includes project cargoes, dropped over 30%. Drewry believes this was due to a double hit of increased competition from other shipping sectors and a slowdown in the project market. Drewry estimates that project cargo volumes fell by almost 15% over the year.

However the outlook is more positive. Global steel production is expected to rise at an average annual rate of 5% over the next two years. The outlook for project cargo is more mixed. While the expectation for 2014 remains subdued, there are signs that this sector should begin to pick up further volumes towards the end of the year and grow in 2015/2016.

Drewry forecasts that demand for the multipurpose shipping will grow at an average annual rate of 5% over the coming years. However, we are only expecting modest growth in 2014, as competition from other shipping sectors will continue to eat away at market share. But we expect the sector’s market share to recover through 2015/16.