Volume growth likely to outstrip capacity

Despite moderate growth in cargo volumes, there’s been little effect on freight rates in the project cargo and breakbulk sectors because of competition, says Raymond Fisch, senior vice president of BBC Chartering & Logistic. And while growth in demand leads to growth in capacity, increasing operating expenses – like marine fuels and required anti-piracy measures – intensify competitive pressure, says Fisch. “As we know the project cargo and breakbulk shipping sector has been heavily shaken up in the past three years and today we still see shipping capacity being offered below cost by some market participants,” he told FTW. According to Fisch, the carrier does not expect the demand situation to dramatically change. “It seems likely it will continue to grow at moderate levels while we expect slower capacity growth. The result will be a relative decline in capacity sooner or later through scrapping of old assets, for example, and growth in demand will exceed supply.” Fisch believes there is room for optimism. “Although the situation remains testing, we have reason to believe that we have marched through the deepest vale of this last crisis and now it seems the industry sees signs of recovery. Still, managing cash flows is paramount in today’s environment.” And he believes the opportunities lie in the challenges. “There are three areas of interest from a heavy industry perspective,” he told FTW. “The first is electric power and energy. This is a pre-requisite for the success of any industrial society and its quality of life. Opportunities lie in anything that relates to power or energy generation, processing and distribution, equipment, components, materials and associated products or services.” Secondly, says Fisch, with millions of people relocating, moving and even building new cities, more mining, excavation and construction equipment is needed. And that drives demand for heavy industry equipment, engineered solutions and associated services. The third area of interest lies in infrastructure and transportation services, ports, vehicles and heavy equipment that are required to move people and objects wherever needed. “All these sectors will continue to drive and dominate demand for heavy lift and project shipping in the future,” he said. INSERT ‘Demand will continue to grow at moderate levels while we expect slower capacity growth.’ CAPTION 1 BBC Amethyst ... part of the line’s approximately 150-strong fleet. CAPTION 2 Raymond Fisch … ‘Opportunities lie in anything that relates to power or energy generation.’ CAPTION