BIMCO: Sharp rebound in shipping unlikely

At the Project Cargo Summit, taking place on 23 and 24 September, Peter Sand of BIMCO presented his outlook for project cargo, heavy lift and breakbulk shipping. He sees ‘an industry under pressure’. Yet, there are opportunities in offshore wind and he advises companies to make sure they ‘do something special to give them the upperhand’.

Right now, the market for shipping in general is tough, according to Sand. This means that other forms of shipping including project cargo get what is left. In this sense, both liner and Ro-Ro shipping pose a threat to project cargo and breakbulk shipping.

Sand: ‘Liner and Ro-Ro shipping are cannibalising on project cargo.’ He explains that with shipping struggling in general, they will basically try to take what they can get, which means more competition for breakbulk and project cargo specialists.

He also says the crude oil prices are ‘a driver for the project cargo sector’, which does not bode well given the recent drop in prices. ‘You need at least USD 60 per barrel to get things going.’ He adds to that that the project cargo, heavy lift and breakbulk industries are dependent on both industrial production and global infrastructure. When it comes to the first, ‘only China has seen recovery since the start of the pandemic, the rest of the world stays at very low levels. That is why BIMCO does not expect a V-shaped recovery for the market, as some hoped would happen. We expect recovery somewhere in the red area (see graph below).’

Booming offshore wind

Yet, it is not all doom and gloom. ‘The boom in offshore wind definitely presents an opportunity,’ says Sand. ‘This is something to make use of. Here you can make a distinction between political and economic interest. When it comes to offshore wind, it is mostly driven by politics, so independent of market factors and therefore a strong and upcoming sector.’

‘In addition, we see dry bulk doing rather well, which is also good for breakbulk,’ states Sand. ‘The dry bulk is driven by imports in China, which has been going against the grain since the start of the pandemic. This sector was kept afloat in China despite the fact that China’s GDP declined.’

Constantly on the move

What is most important to stay successful according to Sand, however, is to make sure ‘you do something special. If you do something others provide as well, you will just get stuck in price wars. The more unique your services, the better you can withstand a downturn in the market. It also means you have to be constantly on the move for new areas to develop expertise in, to stay at the forefront as you can’t defend your own turf forever.’ Developments in heavy lift to handle the ever larger offshore wind turbines are a good example of this.

The Project Cargo Summit is an online event organised by Project Cargo Journal, a publication of Promedia. 

Author: Mariska Buitendijk

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