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Breakbulk June 2021

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16 The Journal of Commerce | June 2021 www.joc.com Breakbulk & Project Cargo cargoes out of boxes into breakbulk modes and turning containers them- selves into a temporarily viable cargo for some MPVs. Empty containers are not an unusual backhaul for many MPV car- riers. But demand for empties and for moving laden containers unrelated to specific project cargoes, not typical in the sector, continues to boom. The MPV sector typically doesn't have many profitable backhauls, Prehm said during the virtual conference, Prehm said. In turn, this means there will be fewer reference figures avail - able to be used for assessing market rates, he said. The 'spillover' eect Worried forwarders are struggling to find transport solutions for their clients in a congested global shipping market, Prehm said in commentary released with the June Toepfer Multi- purpose Index (TMI) update. Conges- tion is pushing formerly containerized RISING DEMAND IS boosting optimism in the multipurpose vessel/heavy-lift (MPV/HL) sector as its decade-long recession recedes and charter tonnage becomes scarcer. However, current MPV rates do not equate to record earnings, according to Yorck Niclas Prehm, head of research with Hamburg shipbroker Toepfer Transport. Rather, they are just now enabling ship owners to earn a margin after years of operating at rates that provided cost recovery and little more, he said. The shipbroker's latest multi - purpose shipping index predicts that MPV charter rates will hit $10,285 per day in June, up 14.5 percent from May and up 61.2 percent year over year. In another sign of a strength- ening MPV market, "free" tonnage available to charter is becoming scarce, Prehm said during last month's virtual JOC Breakbulk and Project Cargo Conference. For the first time since the Great Recession of 2008–09, the overhang of distressed ship assets owned by German banks is dissipating. These ships have tended to undercut earn - ings in the MPV sector. They are still on the water, Prehm said, but most of them have now been sold to owner/ operators. In some segments, such as the 30,000–deadweight ton (dwt) segment, "there is almost nothing left" for sale, he said. Meanwhile, cargo operators that already have a large charter fleet are trying to keep their tonnage, "and they are paying a premium for that," Prehm said. Smaller carriers are pay- ing higher rates when it comes to extending ships or getting ships from the free charter market, he said. "We won't see these ships back on the charter market for a long time," Trending up Strong demand continues to push MPV rate forecast higher By Janet Nodar AAL Dalian discharging modules at the Port of Freeport, Texas. AAL $6,000 $6,500 $7,000 $7,500 $8,000 $8,500 $9,000 $9,500 $10,000 $10,500 Jun- 19 Jul-19 Aug- 19 Sep- 19 Oct-19 Nov- 19 Dec- 19 Jan- 20 Feb-20 Mar-20 Apr-20 May- 20 Jun- 20 Jul-20 Aug- 20 Sep- 20 Oct-20 Nov- 20 Dec- 20 Jan- 21 Feb-21 Mar-21 Apr-21 May- 21 Jun- 21 MPV/HL charter rates continue to climb on rising demand Source: Toepfer Transport © 2021 IHS Markit Toepfer's Multipurpose Index (TMI) average time charter rate per day for 12,500 dwt MPV/HL "F-Type" vessels, based on a 6 to 12 month charter Notes: Index data compiled from operators, owners, and brokers Up 61% from June 2020

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