Better an MPP premium than a project delay

Charter rates and prices for second-hand multipurpose (MPP) vessels are trending above the recognised benchmarks. However, the figures only show a generalised picture of the market. What is hidden behind the baseline number is a nuanced environment of specialised vessel premiums, demolitions halt, retrofits, and future fuel dilemmas. According to recent market reports, charter rates for project-capable MPP vessels have gone above the established indices. As Peter Molloy, managing director at Sea3R and a senior associate, breakbulk and heavylift at Drewry Maritime Research, told HLPFI, the premium stems from the large span of specifications within the project-capable MPP fleet.

“There are some highly specialised vessels that if they’re best suited for a project, they are going to demand to be taken off the market at a premium,” Molloy said. It is a simple calculation for project owners. “If you are running a huge billion-dollar project and you are exposed to not being able to get a vessel, paying extra for the vessel usually works out in the long run as the cheaper option than, say, delaying the whole project,” he added. This insulates project carriers from fluctuations which can be seen in the general cargo segment, which is a lot more exposed to the ro-ro and container markets.

This story was originally published by Project Cargo Journal. Read the full story at Project Cargo Journal →