MPV Orderbook To 2028 Will Not Fulfil Demand

By Carly Fields


With demand for multipurpose ships increasing, particularly in the project cargo sector, the current orderbook is “way too slim,” Drewry has warned.

Speaking at Breakbulk Middle East, Dr Ferenc Pasztor, deputy head of research, said that he expects utilization levels to increase based on demand estimates and assumptions on newbuild orders and demolition activity.

The current orderbook is mainly for heavy-lift MPVs and deck cargo carriers for delivery this year and next. But then there is a big drop in orders due in 2026, then hardly any vessels to be delivered in 2027.

“Given the 2–3-year time period needed to build one of these ships, it is fair to say that owners will need to order more this year, otherwise we will see even higher vessel utilization levels and hence, charter and freight rates,” Pasztor said.

At 160, Drewry’s MPV Time Charter index is described by Pasztor as “still quite healthy from a vessel owner’s perspective, although we need to take into account that the second half of the 2010s was really challenging for vessel owners.”

Drewry’s latest forecast through to 2028 sees modest levels of both demolition and newbuild activity. “This stems from high utilization levels of even the older age groups of the ships and the big uncertainty of what fuel type new vessels should be built to use.”

On the recycling side, the consultant predicts conservative demolition levels through to 2028, only removing vessels 35 years and above. The conclusion drawn is that vessel capacity is indeed needed, and only half of that is in the current orderbook. This raises real risks, Pasztor said.

The analyst’s demolition forecast strongly depends on environmental regulations, he added, particularly the impact of the IMO’s Carbon Intensity Indicator and the EU’s Emissions Trading System.

There has been limited interest in ordering MPVs vessels with alternative fuels. Also, LNG fuel accounts for the majority of alternative fuel MPV orders, which is considered a transition fuel, rather than a true green fuel.

“It will be interesting to see the effects of these on vessel supply, but while we do expect significant effects, the big axe coming to chop will rather be FuelEU Maritime as it cranks up emission penalties year on year,” Pasztor said.


Join the conversation at Breakbulk Europe 2024, taking place on 21-23 May at Rotterdam Ahoy.