Leo Ryan, AJOTIn the volatile shipping market that has accompanied the current global economic slowdown, with many countries entering near-recession territory, the breakbulk sector appears to be better positioned to remain relatively strong, according to a well-known industry analyst. While breakbulk shipping is not recession proof, it should fare much better than the container trades in today’s slumping environment, suggests Mark Page, director of liner shipping at London-based Drewry Shipping Consultants. “It’s a tough time for shipping, but the breakbulk and project cargo sectors should hold up well,” Page told the recent 19th Annual Breakbulk Transportation Conference held in mid-October in New Orleans. He cited in particular the continued expanding demand in the emerging markets of China, India, Russia and the Middle East where, moreover, economic growth could be more buoyant than in the leading industrialized states. “The long lead times on projects will provide a big cushion against the kind of demand collapses which have been seen in the container trades,” Page told some 2,000 delegates representing shippers, ports and shipping lines. In addition, Page affirmed, “…large government involvement in many major infrastructure projects will sustain demand.” He also referred to “the windfall bonus of second-hand machinery/plant exports from developed countries.” Page estimated that under present conditions annual project cargo flow would attain 33 million tons as a result of global annual projects valued at $275 billion. Much of this cargo is energy-related. Although hardly visible in port and trade statistics, Page said project cargo has become “the most dynamic part of the breakbulk market” and home to such fast-growing specialist companies as Beluga Shipping, BBC Chartering, Clipper, Jumbo and BigLift Shipping. He said that demand for vessel space for components for infrastructure and energy-related projects in developing states will remain strong even though breakbulk shipments of commodities like steel and forest products will suffer. Project carriers, Page noted, have been ordering new multi-purpose vessels in record numbers over the past few years, but he affirmed there was no danger of overcapacity in this sector. Among other factors, he said the ratio of new orders to the existing fleet has been much lower than the world container fleet. Page recalled that having been seemingly in terminal decline, the trend has reversed and the world breakbulk fleet “is now seeing managed expansion.” “New vessels,” he went on, “are considerably more productive/efficient than the ships they replace and have the potential to create over-capacity – but they also draw on a different cargo pool and add value.” According to Page, “Many traditional breakbulk lines missed or misread the opportunity and have effectively abandoned the market to a new breed of logistics-based project carriers. Through investment in new ships and methods, project carriers have created a partially-insulated niche within the breakbulk market, resulting in higher rates, higher profits and differentiated products/services.” Page estimated that the multipurpose fleet is expected to increase by four% in 2008, while demand for capacity will increase by about five%. US STATE REGULATION HANDICAPS Among various topics discussed during the conference, there was considerable criticism over the lack of uniformity and predictability of regulations between US states for moving over-dimensional cargo by road – a costly handicap for the project cargo industry. Several states in the Midwest were singled out for suddenly issuing load and travel restrictions on environmental or other grounds that did not exist before. Large wind blade loads were mentioned in particular. Panel moderator Grant Wattman, logistics director of CH2M HILL, a project management concern based in Houston, said that because of the negative impact, it was time to raise the awareness of the regulatory authorities. “This