b'MULTIPURPOSE SECTOR FACING SOME HEADWINDS, BUT LONG-TERM OUTLOOK REMAINS BULLISHBy Ed Bastian, Director of Global Sales for BBC Chartering USA, Special to the AJOTMay 2023 | Published in AJOT Issue #753What a difference a year makes in the topsy turvy world oflifted over the last few years. They have made there way back shipping. A year ago, the MPV [multi-purpose vessel] and con- to the containers vessels for the most part and container rates tainer sectors were riding a wave of optimism resulting fromhave returned back to more normal levels historically speaking. pandemic related issues including a supply chain crisis like wedInevitably, with lower rates there will be some poaching by con-never seen before. Now the end of the pandemic has broughttainership and ro/ro operationsbut this is really just the low back some sense of normalcy in our lives. However, at the samehanging fruit as rigid schedules, and a lack of operational flexi-time life as we once knew it will never really be the same. bility (in the case of containerships) precludes any real market Imustadmit,myselfandcolleagueshavehadnumerouspenetration. The biggest obstacle moving forward is capacity chuckles about how much the term supply chain became theutilization as the industry will be receiving massive numbers of topic of the day for most consumers and news personalitiesnewbuilds over the next few years.during the pandemic. While most had no idea of the definitionThe same cannot be said about the MPV sector as lack of of supply chain until it had an impact on their daily lives and thevesselcapacityvs.cargodemandremainchallenging.The shelves started to become sparse.global fleet overthe past decade has experienced alack of external investment and insufficient internal capital which has TMI and MPV Sector Volatility stymiedgrowthandfleetrenewal.MostMPVandHeavy-lift operators are expected to remain stagnant in respect to overall To any that follow the Toepfer Multipurpose Index (TMI), afleet growth over the next few years. The current MPV fleet for forecast of daily charter rates for 12,500 dwt MPV vessels, thevessels with a combined 100 ton lift capacity is starting to show last two years has seen tremendous volatility in the index. Forits age. Less than 5% of the current fleet is from 0-5 years of age. the period of April 2021 to April 2022 the index rose a staggeringFor vessels exceeding 20 years of age the number is almost 17 121% reaching an all-time record in July. We experienced the%. This disparity points to the lack of fleet replenishment over same type of increases on many commodities during the samethe past decade. Once a vessel surpasses 20 years of service period along with significant inflationary pressures.When theit basically becomes unemployable by most project forwarders, supplychainpressureseasedandcontainerratesdroppedshippers,andEPCs.Itisexpectedthatthecurrentcapacity back to historical norms, this is when we experienced a sharpshortfall will continue for the foreseeable future and that project pullback in the TMI. Even with the sharp drop in the TMI sincecargo freight will not experience the same drop that containers August 2022 the index remains at a healthy level well above bothhave experienced.its 10 and 5 year moving averages. Focusing our attention on the US project market we find a While the current condition of the MPV sector is a bit choppymarket that is surging. A recent poll of major project freight at the moment the longer range outlook remains quite favorable.forwarders found a consensus opinion that business is clicking Gone are the huge volumes of containers that MPV operatorson all cylinders.32'