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Home | Letter to the Editor | First shoots of upside rate sentiment in the MPV market [Letter to the Editor]

First shoots of upside rate sentiment in the MPV market [Letter to the Editor]

The 12th Edition of the MSI for the MPP sector released for Q1, 2024 around the second week of Feb 2024 had predicted a rise in general sentiment lifting the index to a level of 52.4 from the Q4, 2023 level of 51.5. And as if to ascertain the predictions, the rates quoted by the MPV sector indices have sustained their green shoots that commenced in February 2024.

While the previous quotes were flattish, the average daily charter rates for March 2024 surpassed the USD 12,000 mark on the upside yet again as reported by the Toepfer Multipurpose Index (TMI)., a 3% uptick month-on-month (MoM). This is the first time that the index has logged in consecutive monthly gains since its peak in July 2022. The 2.94% upside for the month also saw it registering its biggest monthly percentage gain since February 2022. The more composite Drewry Multipurpose Time Charter Index crawled its way up for the sixth consecutive month to end at USD 8,834 higher than the forecasted level of USD 8,821 per day.

Toepfer’s Research attributed the monthly uptick to a couple of factors- A) A general rise in demand- March would traditionally usher in the requirements for the summer- long work days across projects and sites and more energy demand; B) Better vessel utilization owing to rising mileage as a result of the Suez re-routing (Red Sea risk area). Toepfer’s added that certain charterers were willing to pay rates above the TMI levels so as to strategically secure cargo space thereby allowing them to cater to the future demands of the clients enabling them to strengthen their services. Drewry’s commentary reiterated the effect of the red sea crises while forecasting the next quote at USD 8.853, marginally higher by 0.2%. The TMI predictions are for the index to appreciate by about 4.06% for the next 6 months and by about 7% for the next 12 months.

It is to be noted that the Drewry’s Multipurpose Time Charter Index is a (fleet) weighted average of the day-rates of three vessel size bands: 5-7.5 k dwt, 10-15 k dwt and 15-20 k dwt while the Toepfer’s Multipurpose Index (TMI) covers the 12,500 dwt MPV vessel range on average in the long-sea segment.


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Author of the article: Gautham Krishnan

Gautham Krishnan is the Global Category Manager, Logistics with Fluor Corporation. He has expertise in the Supply Chain area focusing in the Project Logistics domain, analytics and the LogTech space. He has also worked in the areas of Project Management, Business Development and Government Consulting. For his body of work in the mentioned areas, he was bestowed the AntwerpXL 40-under-40 award in the year 2023, and touted to be one of the upcoming, future leaders in the project logistics & supply chain function.


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