The Revival of the Breakbulk and Heavy-Lift Market

A primary driver for the industry’s revival is the recent surge of energy-related projects, especially those with plants emerging around the US Gulf Coast. These projects—whether refineries, chemical, or power plants—not only increase the amount of heavy-lift cargo running through the Gulf ports, but also contribute to the volume shipping domestically to natural gas fields in the Midwest.

The low cost of natural gas in the US not only drives the production of these project plants, but it is also attracting investments from foreign steelmakers.  Globally, steel production is expected to rise at an average annual rate of 5 percent over the next two years (Marex, 2014). In the US, Texas has become the hub for the new steel developments. Major energy companies have announced plans to invest $35 billion in plants along the Houston Ship Channel. One company, Tianjin Pipeline, has started construction on a $1.3 billion plant in Corpus Christi to build steel pipes for oil and gas pipelines (Leach, 2014).

A global contributor to the rise in breakbulk shipping is the growth of the offshore drilling sector. The number of offshore oilfields is increasing, especially off the coast of developing countries in Africa, South America and Southeast Asia.

The demand to transport heavy-lift cargo to these sites is raising concerns amongst carriers about the availability of multipurpose vessels (MPVs). The MPVs orderbook begins to decline in 2014 and 2015 just as the demand for them is expected to rise, so fewer and fewer vessels are being delivered.  The supply and demand is expected to reach equilibrium near the end of 2014; however, the years beyond that could see a higher demand for the MPVs then there is availability, leading to rising freight costs. But as long as newly built vessels can offer some unique quality, such as ecofriendly engines or increased lift capacity, then there remains room for optimism (Oatway, 2012).   

With the expansion of the oil and gas industry creating new demand for energy projects both in the US and globally, the need for heavy-lift and breakbulk shipping will remain certain. While 2014 is expected to see only modest growth in this demand; growth over the coming years is forecasted at an average rate of 5 percent annually (Marex, 2014). As long as the next fleet of MPVs can attract new orders, the industry’s outlook beyond 2014 is looking very bright. 

How can we help?
Allyn Logistics handles breakbulk, heavy-lift and charter shipments in daily basis. Please  contact the Allyn Logistics Group (AllynLogistcsConsulting@allynintl.com) for assistance related to finding transport solutions, negotiating rates, and managing shipments.

Contributor: Lauren Mayher

Works Cited:

• Leach, P. T. (2014, January 22). Retrieved May 29, 2014, from JOC: http://www.joc.com/maritime-news/international-freight-shipping/breakbulk-heavy-lift-market-poised-resurgence_20140122.html
• Marex. (2014, April 03). Maritime-Executive. Retrieved 05 29, 2014, from http://www.maritime-executive.com/article/Multipurpose-Shipping-Positive-Outlook-After-Tough-Year-2014-04-03/
• Oatway, S. (2012). Senior Consultant. Drewry.

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