Looking to 2009 in the project logistics sector, the certainties we knew we faced last year have been radically transformed into unknowns.
For example, a short year ago, we thought it was certain that continued high levels of project cargo volume, combined with record bunker costs, would drive the breakbulk shipping market to new highs. As we enter 2009, we expect to experience declining cargo volume and related transport cost reductions. Container carriers, which for years shunned project cargo, are again attracted to this sector as they feel the brunt of recessionary forces in the consumer-related global supply chains.
Project-dedicated breakbulk carriers, which a year ago demanded unrealistically early bookings and record rate levels to secure space, are again aggressively seeking completion cargo. And, although rates are somewhat stable on certain trade lanes, we are witnessing a renewed desire by carriers to negotiate.
Major engineering, procurement and construction projects are being reviewed, delayed or outright canceled, when a year ago at this time we all predicted an almost limitless continuation of the strongest project market in our generation. Mining projects are being shelved because of the crash in commodity prices. Refinery projects are undermined by oil price swings with continued declining price momentum. And slumping consumer demand is impacting the feasibility of chemical plant construction.
These severe market contractions could impact the project logistics market for several years, or longer. A year ago, we were struggling with finding, training and retaining project logistics workers. Those concerns have abated, and the new concern is employment opportunities for new graduates at project shippers and forwarders.
Every market, good or bad, possesses unique opportunities. Those organizations that can adapt to these troubled times, and develop innovative transport methods that yield cost savings and efficiencies, will emerge from this downturn stronger and more vigorous.