MPV fleet renewal due despite challenging market conditions

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Jost Bergmann Jost Bergmann
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The ability to operate “hatchcoverless” is becoming a standard requirement for modern heavy-lift MPVs.
The ability to operate “hatchcoverless” is becoming a standard requirement for modern heavy-lift MPVs.
At almost 15,000 ships, multi-purpose and general dry cargo vessels make up the largest segment in shipping in terms of their numbers. With an average age of more than 23 years, almost half of the fleet needs to be renewed within the next five to ten years, despite the tough market conditions and challenges owners are facing in starting a comprehensive rejuvenation programme. Efficiency and flexibility are key. DNV GL knows the ropes and is ready to support you.

The multi-purpose vessel (MPV) segment covers a wide range of vessel types split into several sub-segments. It comprises roughly 15,000 ships, from small coasters to high-tech heavy-lift specialists. The ownership is fragmented, many owners possess one or two ships only, but few of the global players have a portfolio of more than 100 vessels. Competition is fierce: charter and freight rates in the MPV segment have been under pressure since the beginning of the financial crisis, and persistent overcapacities are aggravating the problem. Contrary to other shipping segments, MPVs have hardly experienced a recovery period since the financial crisis 2008.

To make matters worse, markets for certain cargoes have virtually collapsed. For example, the low crude oil prices have caused a dramatic drop of orders from the oil and gas industry, in particular on the offshore side. Furthermore, operators from other segments are pushing into the market: “Container ships, bulk carriers and even Ro-Ro ships are trying to win attractive contracts for project cargo, which these ship types can carry without having to make major modifications on board,” says Jost Bergmann, MPV Business Director at DNV GL. “Therefore the ability to use ships flexibly and efficiently is our customers’ top priority,” he adds. 

Among the symptoms of the difficult market situation is an ongoing wave of consolidation initiatives with shipowners merging or selling their business. Those remaining are working hard to attract new business and better utilize their fleets. Since the persistent economic slump has made it very difficult to finance newbuilding projects, the average age of the MPV fleet has risen to roughly 23 years, which is higher than in any other segment. A thorough rejuvenation of the global fleet is overdue for technical, economic and ecological reasons, in particular in the coaster subsegment, where the average age of the fleet is even 27 years. “Almost half of the MPV fleet is older than 20 years. Roughly 7.500 ships must be replaced within the next five to ten years, as it will not be economically feasible to retrofit these vessels with a ballast water treatment plant.”, Jost Bergmann claims.

Because of their operating profile, these ships could take the lead in introducing innovative, cost-efficient and low-emission technologies.

Multi-purpose project carriers must be capable of handling cargo with extreme dimensions.
Multi-purpose project carriers must be capable of handling cargo with extreme dimensions.

Cargo-related requirements

MPVs are the workhorses of the seas – there is almost nothing short of liquid cargo they cannot haul from port A to porthe t B. Whether general, bulk or heavy-lift cargo, most of these vessels are able to carry whatever the market demands, including containers. Because of their great flexibility regarding the choice of cargo they can usually avoid ballast voyages, which do not generate any revenue. 

There is growing demand for longer cargo holds because some project cargo, such as wind turbine rotor blades, rails and pipes, are getting longer and longer, and individual pieces measuring in excess of 100 metres will soon be quite common. Cargo holds that can be subdivided flexibly using grain bulkheads and tween deck panels allow ships to be more versatile when carrying mixed cargoes. 

There is an increasing consideration to equip heavy-lift MPVs with a heavy-lift stern ramp to allow very heavy or voluminous cargo to be loaded by ro-ro operations. Designing vessels to be able to operate “hatchcoverless” is becoming a standard requirement on modern heavy-lift MPVs. 

Another determining factor for the design of an MPV is the size of the ports along its prospective routes, which may limit the size of the vessels that can access them. Environmental conditions also play a major role: some vessels must be equipped to navigate in icy conditions, others may have to meet particularly strict emission limits to operate in sensitive regions. Shipowners and their customers must work together to identify the right ship type for a specific trade. 

Coasters can navigate rivers and canals in addition to coastal waters.
Coasters can navigate rivers and canals in addition to coastal waters.

DNV GL subdivides the MPV segment into five major categories: 

  • Coasters: Smaller, shallow-draught vessels for short-sea operation between ports belonging to the same region, in some cases including rivers and canals; coasters typically carry bulk and general cargo. Only about one-sixth of coasters are equipped with cranes (average combined lifting capacity: 25 tonnes). At an average age of 27.5 years the fleet is well past its prime. In particular, vessels equipped with cranes average as much as 39 years.
  • General dry cargo ships: Dry cargo, craneless carriers in excess of 5,000 dwt designed to carry any kind of non-containerized general cargo such as wood or steel products as well as non-packaged or packaged bulk, the latter using bags, drums or boxes. Often built as “tween deckers” in the past, they feature a double-hull design today. Possible tween decks can be arranged at different height positions. The average age of the fleet is 14 years.
  • Multi-purpose vessels: Dry cargo carriers equipped with cranes with a combined capacity of up to 100 tonnes, capable of carrying both break and dry bulk including bales, and frequently containers; typically featuring adjustable tween decks and pontoon-type or foldable hatch covers. The average fleet age is 19 years.
  • Multi-purpose project carriers (MPP) also called heavy-lift MPVs and premium MPPs (also known as premium heavy-lift MPVs or premium project carriers): MPVs designed specifically for carrying project cargo. A typical project carrier has only one or two box-shaped cargo holds and several powerful cranes capable of operating in tandem to handle heavy-lift cargo. Ships with cranes with a combined lifting capacity between 100 and 250 tonnes are referred to as MPPs (average age: 11.6 years), those with a higher lifting capacity are called premium project carriers (average age: 8.0 years). This group also includes larger liner ships which often have several cargo holds, in some cases subdivided by a longitudinal bulkhead.
  • Open-hatch general dry cargo ships: Large dry cargo vessels featuring several U-shaped cargo holds designed to carry wood and paper products or other general and bulk cargo as well as project cargo, and traditionally equipped with gantry cranes, more recently however also with jib cranes. The fleet, which comprises roughly 300 vessels, has an average age of 10.2 years.

Age distribution of MPV fleet

More than half of the MPV fleet in the market is older than 20 years. New environmental regulations could force shipowners and operators to renew older tonnage.

Open-hatch general dry cargo ships are often equipped with gantry cranes.
Open-hatch general dry cargo ships are often equipped with gantry cranes.

Support from DNV GL

With 1,400 MPVs classed and a tonnage market share of approximately 21 per cent, DNV GL is the leading classification society for this segment. What is more, DNV GL offers a broad range of advisory services. “Our top priorities are to assist our customers in increasing efficiency, profitability and sustainability,” says MPV expert Jost Bergmann. In particular, DNV GL focuses on four disciplines:

  • Design: Ensuring loading flexibility by basing ship design on relevant load assumptions; optimizing the hull form for the intended operating profile; enabling open-top transport of project cargo; selecting the best fuel type; and identifying route-specific cargo securing measures. All of these items increase a vessel’s flexibility and efficiency.
  • Equipment: Optimized design and arrangement of the cargo system, such as hatch covers including handling, seals and supports; tween decks; grain bulkheads; crane selection, placement and tandem operation as well as topped-up stowing position; and efficient loading system operation are all key criteria for MPVs.
  • Propulsion: Efficient propulsion solutions, ranging from efficient 2-stroke engines to geared 4-stroke configurations when lowest engine room height is required, to suit the intended use of the ship. Customized rudder and propeller combinations maximize efficiency. Auxiliary engines may be supplemented or replaced by battery-packs used for optimization of the ships’s auxiliary power management system. 
  • Regulatory environment: Safety and a small environmental footprint are core concerns. An advanced vessel should not only meet the existing emission, ballast water and stowage requirements but be prepared for more stringent future regulations as well. 

Backed by internal analyses, R&D projects and many years of experience with this ship type, DNV GL experts can assist customers in preparing for future market demand when planning newbuilds. To ensure future-proof investments in new MPVs, DNV GL has developed its “Ready” approach: “The goal is to design and build ships bearing in mind potential future modifications,” says Bergmann. This can include alternative fuels, retrofitting battery packs, cranes and direct positioning (DP) systems, or accommodating additional staff on board. Prudent planning can enable a ship to remain adaptable to changing requirements over its entire lifetime.