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Breakbulk July 2018

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SPECIAL ADVERTISING SECTION July 2018 | The Journal of Commerce 25 BREAKBULK & PROJECT CARGO Breakbulk handlers and multipurpose vessel (MPV) operators will face no shortage of competition for any new tonnages. Containership operators, deploying vessels of unprecedented capacity, are eager to stuff boxes with anything that will fit. Roll-on, roll-off carriers will look to supplement their traditional shipments of automobiles with anything that can be driven or towed up their ramps. Beyond pure volumes, ocean carriers in the breakbulk and project business yearn for a return to more compensatory rates. These prospects are brightening as the total fleet moves toward a rational capacity balance. Drewry Shipping Consultants expects that the level of scrapping of outmoded vessels, coupled with a rational level of new builds entering rotations, will have a healthy effect on pricing. Additionally, a rallying global economy may divert the attentions of container and ro-ro carriers to their more traditional business lines. A recent Drewry report itemizes the trend. They note that the total worldwide MPV fleet of just over 3,000 vessels is expected to remain stable as the rates of ship retirement and new launches remain virtually equal at about 600,000 tons per year. While the number of vessels remains constant, the capabilities of the modernized fleet position MPV carriers to capitalize on a rebounding global economy. They will enjoy the benefits of their chosen focus on project cargoes, which are often awkward and hard to handle and, as a result, can tend to be unattractive to container and ro-ro carriers that are more intent on ease of loading and unloading. Their ability to ply harbors with draft and channel width limitations enables them to serve locations inaccessible to their competition. Finally, their onboard crane capacity permits them to transfer high, wide, and heavy freight at terminals with limited shoreside lift. The simmering topic in the breakbulk/project arena, and in international trade as a whole, is the potential impact of the escalating tariff feud between the US and Chinese administrations. Given the fact that US-China trade represents only a fraction of total international commerce, and the new tariffs are commodity specific, industry sources are projecting limited consequences. Analysis of the steel trade and the potential effect US tariffs might have on the global market finds that with US imports just 8 percent of global steel, the vast majority of which comes from Canada and Mexico, experts do not expect it to have a huge effect on trade volumes. Rather, they believe the main losers will be US ports that will not see the throughput of steel and project cargo at customary levels. Overall, projections call for continued modest growth in the steel sector. This trend bodes well for new projects in both mining and coal, industries whose output is vital to steel production. Susan Oatway, Drewry Shipping Consultants' senior analyst for multipurpose and breakbulk shipping, cautions that any escalation in the tariff feud could simultaneously generate decreases in cargo volume. Further, it could result in excess capacity and catalyze predictable rate pressures on ocean carriers across all freight categories. "With respect to a domino effect of retaliatory tariffs, especially from container lines and car carriers participating in the project/breakbulk sector: Our forecast is for an improving container market. The encroachment into breakbulk is expected to slow (not reverse as there is too much investment) as the move back to traditional cargoes quickens. However, if the tariffs effect those traditional cargoes of both the container lines and the car carriers then there will be far FOR MORE THAN 20 years, it has been BBC Chartering's purpose to provide market- leading shipping solutions for project, breakbulk, heavy lift and general cargo requests on a worldwide basis. Today, BBC Chartering proudly employs the world's largest fleet of multipurpose and heavy lift vessels and operates "apac" service, the world's only high performance service for "any port, any cargo." As BBC Chartering customer, you profit from our high- frequency liner and semi-liner trading network and the flexi- bility and reliability this provides on a global ba- sis. Our fleet of 140-180 modern project carriers is always in position and ready for your cargo. This provides un- limited possibilities for shippers, even meeting lifting requirements up to 3,000 mt. Our team of 400 project cargo profession- als is always close, making things happen for you in over 30 offices around the globe. Together with our partners, we work hard to ensure the seamless delivery your project. We feel privileged to provide a hassle-free service; secure and trusted, for single cargo requests, sophisticated heavy lift operations, or for strategic volumes; always delivered with utmost care. Contact BBC Chartering to benefit from an award-winning global service, experience our high-performance solutions, and make sure your project is "anchored by excellence." n BBC Chartering GmbH — as agents Hafenstr. 10b 26789 Leer Germany Phone: +49 491 9252090 Fax: +49 491 9252099 Email: YOUR BEST STRATEGY FOR PROJECT SHIPPING Drewry Shipping Consultants expects that the level of scrapping of outmoded vessels, coupled with a rational level of newbuilds entering rotations, will have a healthy effect on pricing.

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