Future fleet dynamics in the MPV space have been a major topic of discussion in the sector, with increasing demand expected but newbuild order activity still being tepid. This topic has been scrutinized in Drewry’s latest Multipurpose Shipping Forecaster report, sources Drewry.
New Orders
In recent quarters we had to add more vessels to our theoretical MPV orderbook to balance other elements of our model. These additional vessels do not yet exist; however, we expect that the growing demand outlook will incentivize further real-life new building orders.
With low slot availability and the time required to build the various types of vessels that make up the MPV fleet, we see the near-term order book as set and have not added any additional vessels for delivery in the years 2024 and 2025. Even if we see an uptick in new-build ordering in the next two years, it is unlikely those additional ships will get delivered before 2027, leading to a tight market in 2026/27, especially in the Project Carrier segment.
Absence Of Additional Orders
With the help of our model, we have also examined what happens if there are no additional orders during our forecast period and this led to climbing utilization and time charter rates. We expect that the nature of the upcoming upturn will be different from 2021/22 in the sense that the high utilization and TC rate levels will be achieved exclusively by the demand generated in the sector, without the additional “help” from container shipping.
This should increase the appetite for more MPV new builds. But we also must consider that theoretical additions of vessels may not be achievable as time moves on. With slot availability showing later and later delivery dates, slippage, and the normal time taken to build a vessel, we must adjust the model each quarter and fore-estimate TC rates as it becomes unlikely that vessels will be delivered by the time we forecast they are needed. While other sectors competing for general cargo (such as dry bulk, cellular containerships, car carriers) will likely alleviate the expected supply crunch of MPVs, a significant increase in TC rates seems unavoidable at this point.
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Source: Drewry
