One of the more significant changes in the multipurpose/breakbulk industry is the increased focus on safety and quality.
One key concern from a safety standpoint includes the requirement of owners to provide specific mitigation policies for their ships passing through designated piracy waters. Within the tanker industry, a strict safety and quality focus exists whereby vessels and ship owners are subject to frequent vetting by the major oil companies. If the vessel or the owners don’t live up to these quality checks, they will simply be disqualified from bidding on the business.
Most of the cargoes transported in our industry are overdimensional and heavy. From a technical perspective, the operational aspects of carrying these cargoes is unique. In many cases, these cargoes have an extremely high value, requiring the charterers to have detailed insight into individual ship owners and their respective vessels, including but not limited to the safety programs and operating procedures they have in place.
As the safety environment evolves, it will become more difficult for some less sophisticated owners and operators to compete. In our view, this trend will result in the preference of the client base to do business with owners who own and technically manage their own assets, thereby ensuring a seamless vetting process from the technical and commercial side.
Another significant change in our industry is that the multipurpose fleet isn’t expected to grow over the next three to four, whereas demand will be increasing. In the last couple of years, there has been an oversupply of tonnage. We feel the markets are poised to strengthen and demand for multipurpose tonnage will outgrow the supply. This could indicate a shortage of quality capacity, and a firming rate environment.