Author of the article: Gautham Krishnan
A mixed bag of price movements that outperformed the other factions of freight, yet underperformed themselves- that could be the sum-up to how MPV prices behaved in 2023. A barrage of factors such as a bleak demand pick-up, trailing project pick-ups and slowing construction activity, revisiting contracts and figuring convenient cost-friendly alternatives have affected the sector over the year.
The orderbooks show some small movements for the MPV fleet but it’s a wait and watch mode. Amidst all this the Toepfer’s Multipurpose Index put up a 33% discount in prices as against the previous year, with a 2.93% erosion for the month of December. The prices touched USD 11,850 and broke the resistance of USD 12,000, which also (nearly) coincided with the 5-year moving averages.
There are both sides to this pricing activity. On the one hand, they still outshone Container and (possibly) Air freight and on the other hand, the nearly one-third erosion prices were the worst in a decade. A high-base effect was a definite trigger for the downside that commenced during August 2023, given a 170% bump-up in prices in 2021. The commentary from Toepfer’s maintained that while the index underperformed, it still performed well enough while maintaining how the prices reflected that of a real-world, specific type of vessels. However for what’s on the horizon, Toepfer Transport expects the index rates to retract up by some 2.9 per cent over the following six months, while the forecast for the TMI for the next 12 months is expected to be about 8.2 per cent higher.
We saw earlier in the previous week that the Drewry Multipurpose Index continued its retracing for the third consecutive month, reaching USD 8,701 as against USD 8,583 in September 2023 aided by the activity buzz in the smaller vessel segments. A similar analyses points out how the Toepfer’s shortsea indices have bumped up, off their troughs witnessed in August 2023, registering about 15-20% gains over the past two months.
2024 would be critical for the project industry as it would await to see some of the projects finally take off and induce demand, even though the economic forecasts cite a hawkish/ neutral year.
Author of the article: Gautham Krishnan
Gautham Krishnan is a logistics professional with Fluor Corporation, in the area of project logistics and analytics, and has worked in the areas of Project Management, Business Development and Government Consulting. He has been bestowed the AntwerpXL 40-under-40 award for the year 2023, as one of the upcoming, future leaders in the project logistics space.
