The Market Sentiment Index (MSI) for the MPP and breakbulk shipping industry dropped to 53.0 in Q3 2025—the lowest reading in over a year—reflecting mounting unease over global trade tensions, especially U.S. tariff policies.
The 18th edition of the Market Sentiment Index (MSI), compiled by One World Shipbrokers, paints a picture of rising concern in the MPP (multipurpose vessel) and breakbulk cargo sectors. A complex mix of geopolitical instability, disruptive tariff measures, and overcapacity in adjacent markets is eroding industry confidence.
Although the MSI remains above the neutral threshold, the 53.0 reading marks a continued downward drift, extending the decline observed in recent editions. Market participants highlight uncertainty introduced by U.S. economic policy, with tariff measures—though not as extreme as once feared—still impacting project planning and investment timelines.
The summer holiday slowdown, historically a weaker period for freight volumes, is compounding concerns. While the oil and gas project sector is maintaining strong cargo flows, the general breakbulk market is under rising pressure.
Container Rates Collapse, Spillover into Breakbulk
Container freight rates have collapsed sharply following a wave of frontloading shipments in response to U.S. tariff threats earlier in the year. Newbuild container tonnage deliveries are exacerbating the glut, pushing operators to explore breakbulk opportunities in a bid to soak up spare capacity.
With container carriers such as COSCO continuing to build up their presence in the MPP sector—underscored by a recent 15+15 vessel order for 80,000 dwt geared ships—the competitive landscape is shifting. These larger, more flexible vessels are poised to intensify pricing pressures on traditional MPP carriers, particularly on routes where breakbulk and containerized cargoes overlap.
Security Crisis in the Red Sea Deters Carriers
Security remains another significant destabilizer. Hostilities have flared once again in the Gulf of Aden, where Houthi rebels have resumed attacks on commercial shipping following strikes on Iranian nuclear facilities. In July, two Greek-owned vessels were sunk, prompting most carriers to withdraw operations from the region.
This renewed threat has kept the Suez/Red Sea corridor effectively closed to many MPP operators, supporting elevated freight rates for alternative routes. However, hopes for a resolution remain, with diplomatic efforts ramping up to de-escalate the Israel-Hamas conflict in Gaza. A peaceful settlement, while welcomed, may eventually pressure rates downward as routes reopen.
Sentiment Diverges by Region
The MSI’s regional breakdown reveals diverging outlooks. European carriers continue to outperform the global average, buoyed by easing inflation, falling interest rates, and capital inflows from the U.S. Six of the last seven MSI surveys have shown positive movement from European respondents.
In contrast, U.S. carrier sentiment is deteriorating rapidly. Market players are grappling with conflicting signals from Washington, ranging from industrial stimulus to protectionist tariffs. Confidence has fallen back to levels not seen since the challenging summer of 2023.
Asian sentiment is more stable but subdued. Carriers in the region are increasingly cautious as the U.S.-China trade deal deadline is once again delayed. While both sides are expected to reach a politically palatable agreement, the uncertainty is chilling forward activity.
Subindexes Show Early Warning Signs
The MSI’s subindexes, measuring operational, future, and investment sentiment, all reflect varying degrees of pressure. The Operational Index (short-term outlook) continues to trend positively but has lost momentum. The Future Index (6–12 months) remains elevated but is starting to soften. The Investment Index, which tracks purchasing and recruitment activity, remains under watch as cautious sentiment impacts asset and hiring decisions.
Interestingly, carriers are expecting a tightening of fleet supply over the next 12 months. Newbuild activity is mostly at replacement levels, and the current fleet is described as balanced. With demolition activity likely to increase, any improvement in demand could rapidly shift the supply-demand balance in carriers’ favor—if and when the economic fog lifts.
MSI Outlook: Hope Mixed with Hesitation
Despite the downturn, carriers are not in full retreat. Nearly 58% of respondents did not report lower scores, suggesting that while pessimism is growing, it is not universal. Only three participants reported unchanged inputs—the highest level of input stability observed so far—signaling market ambivalence rather than panic.
The original forecast for this quarter was an MSI reading of 55.2, made a year ago. With the index now trending below that, expectations for a sharp rebound have dimmed. Still, respondents continue to show cautious optimism, with a similar reading expected in the next edition.
Meanwhile, One World Shipbrokers has announced its relocation to The Hague, Netherlands, where it will continue providing broking and operational support across the MPP, breakbulk, and heavy lift sectors.
