Here we interview Susan Oatway of Drewry to gain some deeper insights into the MPP and Heavylift market, transparency and opportunities, but also to learn more about the professional behind the industry forecasts.
It is part of our Forecaster series – this is the second quarter report.
Covid-19 has had a significant effect on world trade and the long term ramifications to the economy and global investment are still uncertain. The MPV/HL sector sits between containers and dry bulk and, as such, is subject to the market changes from there too. 2020 is not going to be an easy year for anyone in the dry cargo sector, but the potential rebound should put demand growth back onto an upward trajectory by end 2021.
We have moved away from best and worst case – we now have a base case and then two – worsening – scenarios based on the containment on Covid-19. Base case is that C-19 is contained globally over the next few months and there is no second wave. This allows the global economy and dry cargo demand to rebound in 2021. Worst case is that C-19 is not contained until 4Q20 and then a second wave occurs in 1H21. This results in further recessions for the economy and longer-term damage to demand, causing a longer downturn in the freight market.
Our forecast for the fleet as a whole is a slow decline – this is irrespective of C-19. It is possible – in the worst-case scenario – that decline will worsen as a lack of investment will impact new ships.
Inevitably it has worsened for the short term at least due to the C-19 impact on the global economy.
Readers’ Questions to Susan
- Why do you do what you do?
I have loved this industry since about Day 2 at P&O Bulk carriers, which I joined straight after getting my (maths) degree. I am very lucky to have a job that I enjoy doing, that allows me time to “give back” to students and means I get to meet the most interesting people in the business!
- At BBN, we are all about opening up the industry and creating an environment of transparency. We would love to know what your view is on transparency in the market?
Breakbulk is one of the least transparent in the maritime sector. Some of that is due to its nature – the ships are not standard, they carry a range of commodities, that are often loaded and stowed completely differently and definitely priced differently, and the customers come from very different industries. However that said, there are some owners who enjoy this lack of transparency as they believe it keeps new entrants out. I am not convinced that is a good enough reason for it.
- Where do you see opportunities in our industry?
Well 6 months ago I would have said project cargo and in particular renewable energy. Post the onset of C-19, I think the latter is still true but the oil market crash means there is likely to be a real hole in future investment for oil & gas.
- What else keeps you busy besides drafting industry reports and sharing your market knowledge globally?
Mainly the Institute of Chartered Shipbrokers (ICS) at the moment. C-19 and the associated lockdowns meant we had to defer our May exam sessions to July for most of our students. We also (by we, I mean the brilliant staff at the head office) very quickly put together an online teaching resource to support the students globally.
We are looking for a new Director as Julie Lithgow OBE has recently resigned after 8 years with us. It is proving very difficult to fill those shoes I can tell you. We are also trying to improve our governance to make the Institute relevant to both the maritime industry and maritime education in 2020.
In my limited spare time, I run a colony of Beaver Scouts (children aged 6-8 years old). This has all had to move online – zoom meetings for 14 small children are a thing to behold!
But the changes to how all of these young people (scouts, students and my just-turned-16 son) now have to live their lives are significant. Not everyone is coping well so anything any of us can do to help that – whether it is mentoring our students, teaching kids how to do knots over zoom or just making time for our family – is probably the most important job any of us do now.
The full quarterly multi-purpose forecast can be purchased here.
About Susan Oatway
Susan is a highly experienced consultant, for more than 13 years she has been the principal author of Drewry’s Multipurpose and Heavy Lift publications.
Susan is fully conversant with the all aspects of the multipurpose and dry bulk shipping market. She has extensive project experience working for carriers/shipping lines financial intermediaries and other key industry stakeholders. Her advisory expertise is considerable and includes market studies, valuations and strategic planning. She is regularly asked to share her market knowledge and insights at leading industry conferences and lectures on dry bulk chartering for a number of institutions including the Institute of Chartered Shipbrokers.
Susan is currently Chairman of the Institute of Chartered Shipbrokers, the first woman in this position in its 109-year history.