The year 2023 has been “better than expected”, one of the comments in the recently closed Project Cargo Journal Market Monitor said. Geopolitical uncertainty and supply playing catch-up with demand have pushed the sector in many ways, but despite this, it faired quite well. The overall picture has been helped by the fact that there were still a lot of projects going into execution.

Based on the responses, the demand mostly came from the oil and gas sector, followed closely by the offshore wind industry. “Despite the downturn in the worldwide economy, there are still a lot of projects going into execution and modularisation is almost always implemented, thus providing a lot of opportunities for the industry,” one of the participants commented.

However, it was noted that container carriers have returned to the market picking up breakbulk and project cargo. Additionally, the construction of new breakbulk and geared vessels is lagging behind the expected demand coming from the growing wind energy market.

Early in the year, the Hamburg-based shipbroker, Toepfer Transport noted that there were no effective MPP newbuilding orders in the first quarter of 2023. Furthermore, in an interview with Project Cargo Journal, Kasper Heiselberg, Head of Global Wind Renewable Energy at deugro, said that the ambitions of the wind industry are too high. “The supply chain is not ready, not at all. All the big ambitions are not going to materialise,” he said.

Geopolitical uncertainty

The year was plagued by geopolitical uncertainty as well as natural phenomena that created a perfect storm towards the end of the year. The severe drought that has had a major impact on the water levels in the Panama Canal is restricting the movement of heavy-lift multipurpose vessels.

This pushed several operators to take the long way around and cancel their Panama Canal sailings, all setting May-June 2024 as the likely period for the return to the waterway.

The Panama Canal crisis coincided with Israel’s attack on Gaza and the subsequent retaliation of the Houthi militia that started attacking vessels with ties to Israel. While some companies implemented war risk surcharges, others completely cancelled sailings through the Red Sea and the Suez Canal, and headed around Africa. Add to that labour shortages and some port congestion, 2023 saw a perfect storm.

Mixed expectations

If the year 2023 could be classified as satisfactory, the year 2024 could be a mixed bag, at least according to the responses to the survey.

While some expect the market to continue growing, albeit slowly in 2024, others expect significant risks to the industry due to the current geopolitical climate. The shortage of supply vs. market demand is expected to continue, especially in the offshore wind market, continuing the narrative of the past couple of years. Furthermore, respondents feel that the wind market has a limited number of players which may create some more bottlenecks. All in all, the prevailing feeling is that there is plenty of project cargo to be moved despite all the global uncertainty.