Fleet Flexibility Faces New Pressures

By Amy McLellan

Geopolitics, trade route disruptions and infrastructure shortcomings are reshaping the breakbulk and multipurpose vessel market, according to industry leaders on a panel session at Breakbulk Europe.

The panel, moderated by Peter Molloy, managing director at Sea3R and senior associate at Drewry Maritime Research, said the industry currently finds itself with very limited spare capacity.

According to Axel van Pul, regional head of project cargo for Europe and Mediterranean at MSC, the latest global figures suggest that less than 1% of the fleet is idle in the container sector.  “Basically everything is sailing,” he said, highlighting how the Strait of Hormuz, Bab el Mandeb and Suez Canal issues are soaking up capacity. “Of course, if everything opens up again, then it will be a different story, but for now we don’t see an overcapacity.”

For project forwarders, this debate lands differently. “The issue isn’t one of shortage or surplus but of a mismatch,” said Vilasini Krishnan, commercial manager of 4D Consulting, part of deugro Group. “Are the right vessels available, both for what’s happening right now in terms of projects, and also what we see happening in the next two to three to five years?”

It’s not only the at-sea tonnage that represents potential project bottlenecks, with a number of panelists concerned about shoreside constraints. “In the UK, there are so many projects in the pipeline, including carbon capture and SAF [sustainable aviation fuel] projects, but the biggest bottleneck we’re seeing is the port infrastructure,” Krishnan said. “Not all vessels, particularly those that are able to take these large, modularized cargos, can call at these various ports.”

Van Pul agreed, noting that port congestion is a worldwide issue. “The lack of port infrastructure, terminal infrastructure and lack of capacity on the land side is still eating into the capacity on the ocean side,” he said. “It doesn’t have to be a port — even if it’s just a trucking site, you create a bottleneck on the land side, and your ship can’t be handled so it becomes an issue of storage capacity instead of a fleet capacity.”

Geopolitics continues to have a heavy influence, not only with certain corridors effectively closed due to war risk but also with the rise of a new maritime nationalism. This is starting to feed into newbuild decision-making, said Frank Mueller, regional general manager at AAL.

“How much of this geopolitical nationalistic tendency we’re seeing worldwide is actually then filtering into our business, where forwarders may have to consider not only vessel availability and price but also whether this vessel will ultimately be stopped before it even gets to the port because that country, for whatever reason, decided not to accept vessels under that flag or owner anymore?” he asked.

Geopolitics also influences cargo flows, with a shift away from renewable energy in some regions and a resurgence in oil and gas projects.

The key message from the panel was that this is an industry that has the capacity and experience to adapt to these changes, as it has consistently demonstrated from Covid onwards. Ulrich Ulrichs, CEO of BBC Chartering, pointed out that increased cooperation and discussion between all parties earlier in the process would only improve outcomes for everyone, whatever the future may hold.

Top photo (L-R): Peter Molloy, Frank Mueller, Ulrich Ulrichs, Axel van Pul, Vilasini Krishnan. Credit: Richard Theemling Photography

Second: Frank Mueller. Credit: Richard Theemling Photography