Multipurpose and Heavy-Lift Segment Growing

With demand increasing, capacity tightening and competition waning in other segments, the outlook for multi-purpose and heavy-lift fleets is brightening. It is also beginning to attract investment after a long lull.

German KG house Dr Peters had departed the heavy-lift and multipurpose investment market in the post-2009 downturn in shipping, but has recently returned to the game.

Analysts with Drewry Shipping have stated that there could be an annual growth rate of 2 to 3 percent due to improvements in a few key markets, such as oil and gas, petrochemicals and commodities.

In addition, there has been an increase over the recent past in consolidations and partnerships.

Another factor beyond the mergers and consolidations is an improvement in the capacity balance of the sector as older and smaller vessels are being scrapped. This opens the way for investment interest in modern vessels able to meet the current regulatory requirements and those that are coming into force in the near future.

Ro-Ro Increasing in US Ports

The flow of vehicles and other Roll-On, Roll-Off (RoRo) cargo through US ports in the first half of 2018 went smoothly regardless of the threats to international trade norms. As of May, reports have shown that the ports of New York-New Jersey, Jacksonville, Baltimore, Brunswick Georgia, and Hueneme California, have handled 1.7 million cars and light vehicles. This number is an increase of 17% over the same time period in 2017.

Due to the expanding auto manufacturing industry in the Southeastern US, exports going through Jacksonville have increased and the Director of Cargo Sales at the port has stated the aim to create a "density of services" for the industry and is currently developing a new auto terminal at Dames Point. Most of the exports are heading toward Central and South America and the Middle East. Auto imports through the Jacksonville Port are originating in Japan, Mexico and Germany.

The long term indicators point to further increases in Ro-Ro. The port of Brunswick, Georgia is taking advantage of this trend to continue infrastructure investment. This move will be part of a plan to expand the throughput of the port from 800,000 units annually to 1.4 million.

At the Ports of New York-New Jersey, there was a 14% increase in auto cargo in 2017, the third year in a row that showed growth.

While trends are pointing to growth and the Ro-Ro market is strong, it is tempered by unsettled negotiations in the North American Free Trade Agreement and the long term effects of already imposed and threats of future tariffs on the global marketplace.

Technology for Visibility

When asked, topping the list of challenges for ocean container shippers is most likely "lack of visibility".

By lack of visibility they mean they are unsure of where a container is at any given moment, and perhaps more importantly when there is a deviation from the scheduled plan. Part of the reason for this uncertainty is that the cost of active sensors being attached to all dry containers is in many cases prohibitive for accurate and continuous reporting.

Industry leaders stated in 2017 that it would not be too long before the prices dropped enough to make them available for the approximately 20 million dry containers around the globe. The reality in 2018 is that has not happened as yet, and shows no real signs of happening on the horizon.

AAnil Vitarana, former US president of United Arab Shipping Company stated "I expect sensors to be attached to all containers within the next five years. There is no chance that carriers could recover the cost as an add on. It should be considered as a service enhancement."

Such a service enhancement would be the ability for shippers to know when there is a deviation from the schedule. Knowledge of late arrivals, and by how much the arrival will be late, would allow for shippers to inform their clients of such deviations. Although there has been improvements recently, as of January 2018 the reliability of schedules was at about 66%.

The addition of technology that allows for transparency and quality reporting would benefit the industry as a whole and could open doors for future advancements.