You are here
Home | Letter to the Editor | MPV Market at pause and play, as utilization seems up- Courtesy: Suez and Panama

MPV Market at pause and play, as utilization seems up- Courtesy: Suez and Panama

A glance at the February 2024 numbers for the key multipurpose vessel indices would possibly not reveal anything, except a stable/ flattish movement of rates for the month across the composite market- weighted. But is there more than that meets the eye.

The Container prices have risen by 100-300% across the key global trade lanes of Asia- Europe, Asia- US East Bound, Asia- Mediterranean and Europe- Asia ever since December 15 2023, coinciding with the Red-Sea disruptions and the carriers re-routing via the Cape of Good Hope as an alternate transit to the Suez Canal. Given that about 60% of the maritime traffic accounted for the container fleet, the MPV market which played a small portion of the cargo transits across the canal hardly reacted to the change. But the effect of spill-overs was seen in pockets. Air Freight Prices had a sudden blip on certain trade lanes and despite a lean possibility, the added transit time via Africa was believed to play a mild domino effect on the MPV market. And it looks like, it has, in essence.

The Toepfer’s Multipurpose Index (TMI) registered its second monthly gain since July 2023, despite the magnitude of gains registered for the month being a measly 0.2%. The Drewry Multi-purpose Time Charter Index which was believed to appreciate to USD 8,753 per day, exceeded expectations by logging in USD 8,783 per day on an average after accounting for the  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. The Drewry MP Index is expected to appreciate further to USD 8,821 as a guidance for its next quote. The resultant expectation is on account of better utilization numbers in the freight market owing to the combined disruptions from the Panama and Suez gateways. The Panama Canal authorities have been maintaining their stance on allowing 24 transits per day for vessels, which would be decided based on bidding for the slots, a scenario applicable to the Breakbulk sector.

Toepfer, did reiterate the above scenario of high utilization while stressing on the “long-term application” changes in terms of vessel operations for the MPV sector, as a means of stabilizing the sector rates. The spillover from container sector is possible in a scenario of allowing the vessels to take in critical container-bound cargo owing to the tramp nature of the vessels, which could still be a minuscular percentage owing to the high supply of container vessels globally and with a sea of fleet expected to hit the waters in 2024.


Author of the article: Gautham Krishnan

blank

Gautham Krishnan is a logistics professional with Fluor Corporation, who has expertise in the Supply Chain area focusing in the Project Logistics domain, analytics and the LogTech space. He has 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.

Print Friendly, PDF & Email

“Disclaimer: “Breakbulk News & Media BV (Breakbulk.News) assumes no responsibility or liability for any errors or omissions in the content of articles published. The information and or article contained in these articles is provided on an “as is” basis with no guarantees of completeness, accuracy, usefulness or timeliness…”

blank
blank
blank
blank
Top