The multipurpose fleet with the breakbulk sector has had a good run and a seasonal slowdown might be just that. But with COVID impacts and a multitude of other disruptive factors, nothing is a given now. 

MPP vessel AAL Dalian

The breakbulk sector of the dry bulk shipping market has entered the “seasonal” summer of doldrums. Of course, any reference to “seasonal” or “annual” in the shipping markets must be said with post-COVID caution. It takes only a short look back to last year to understand the prudence in ascribing normality to decidedly abnormal circumstances – post COVID rebound and China lockdowns and slowing economy, inflation, recessionary trends in many economies, Russia-Ukraine war and impact on global markets, etc. 

The “Breakbulk” sector, of the Dry Bulk shipping fleet is normally considered to be self-sustaining (sometimes called multipurpose ships or MPPs) meaning onboard cranes to handle cargo, vessels in the smaller sizes loosely slotted into the Handysize (up to 40,000 dwt) or Handymax (up to 60,000 dwt) largely for the purposes of establishing freight rates and other baseline shipping data. Within these loose parameters there are many individual ship classes, often dedicated to specialized handling of oversized cargos like wind blades or mining equipment. However, these ship haul everything that can be placed in a ship’s hold and thus compete with other sectors such as ro/ro and even in some circumstances containerized shipping. For those reasons, size and markets, the rate structure of breakbulk shipping has been fairly modest. 

Summer Solstice for Breakbulk?

Take for example, Toepher’s MultiPurpose Index or TMI. Toepher Transport is a Hamburg-based shipbroker primarily engaged in S&P (Sale and Purchase) and newbuildings with particular interest in multipurpose vessels – generally smaller sized vessels. The TMI is a barometer of MPP charter rates for the sector but also a guide to the breakbulk sector in general.

The monthly index from July of 2017 until March of 2021, ranged between $6,265 and 7,520 with a high of $7,578 in November of 2019. But there was a steep climb in the TMI from January 2021 until January of 2022, when a slight leveling off began. Over that time the TMI went from $7005 to an astounding $21,863. In the recently released July 2022 TMI the rates were $23,099 compared to $11,225 back in July of 2021. Topher’s market commentary for their July release suggests a seasonal slowdown: “Along with rising temperatures, the holiday mood is increasingly spreading, making people leave for summer vacation and have business activities decelerate. We are back to a more ordinary seasonal slowdown scenario in the short sea sector with TCE’s only marginally sliding on the back of lower but still stable demand. Vessel earnings keep a solid level of more than 50% above those achieved 12 months ago.”

And for the MPP sector that might be so. Historically, the sector has been slow to add new tonnage and only recently – with the  rise in charter rates – has renewed interest…

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