MPV Market Outlook: Project Cargo Demand Drives Rate Increases with Tight Vessel Supply

The market outlook for the MPV sector is looking positive for both charterers and shipowners, despite challenges like geopolitical conflicts and anticipated trade tariffs. One of the main reasons for this optimism is the high demand for project cargo, which is driving the utilization of Project Carriers and leading to higher rates.

In 2025, we can expect to see an increase in General Cargo and Project Cargo freight costs, largely due to trade dynamics. Drewry’s Breakbulk Sea Transport Indices predict that while both indices will rise, the gap between the General Cargo Index and the Project Cargo Index is expected to widen. This is because the two shipping markets are influenced by different factors.

There will be a surge in the utilization of Project Cargo Vessels as supply tightens and demand for Project Cargo remains strong. On the other hand, General Cargo vessels will need to find alternative methods for transporting their cargo. The performance of the container and dry bulk markets will significantly impact General Cargo vessel utilization.

In the charter market, General Cargo rates are forecasted to increase by 1% to 7% for different vessel sizes, while Project carrier charter rates are expected to rise by 10-20% in 2025. Recent fixtures show a robust demand environment, especially on routes to the Middle East, Africa, and Europe.

Despite sustained demand and low availability of Project Cargo vessels, rates are expected to remain supported until 2026. The MPV fleet did not expand as anticipated, with fewer vessels delivered and demolished, resulting in a total capacity of 60 mdwt. While only a few orders were placed in the second half of the year, deliveries are predicted to be limited over the next two years.

A majority of the General Cargo orders for 2025 will be for replacement tonnage, leading to marginal growth. With an increased supply of containerships, competition with MPVs is expected to intensify. However, there is anticipated growth in the Project Carrier fleet, even though a tight supply of Project Cargo may lead to higher charter rates. Delays in deliveries in 2025 could further drive rates up next year for project cargo.

For more detailed information, you can view the full report by clicking here. For any further inquiries, feel free to contact Drewry at +44 (0)207 538 0191 or [email protected] You can also visit www.drewry.co.uk for additional information.