Overall confidence levels in the shipping industry fell during the three months to February 2015 to their lowest level for two-and-a-half years as a result of over-tonnaging, lower oil prices and the growth of investment by financiers from outside shipping, according to the latest survey released by international consulting firm Moore Stephens.
PTI previously reported that Southeast Asian gross tonnage is expected to increase to more than 4.8 million in 2015.
In February 2015, the average confidence level expressed by respondents in the markets in which they operate was 5.5 on a scale of 1 (low) to 10 (high), down from the 5.7 recorded in November 2014.
This is the lowest figure since August 2012, and compares to the record high of 6.8 when the survey was launched in May 2008.
One survey respondent said: “Dramatic over-ordering in the dry cargo market in the last two years has led to the catastrophically bad market we have today. What is now even more frustrating is that those clever guys who thought that dry cargo newbuildings were a good idea are now starting to convert them to tankers. Excellent! Let’s hit another sector that has just found its feet with more unnecessary orders! When will people learn?”
Despite claims of increased demand growth in the dry cargo market, Drewry Shipping Consultants recently stated that this is anticipated to be offset by falling project cargo volumes over the next 12-18 months.
The survey revealed that the likelihood of respondents making a major investment or significant development over the next twelve months was down on the previous survey, on a scale of 1 to 10, from 5.3 to 5.1, the lowest figure since February 2012.
Richard Greiner, Partner at Shipping Industry Group, said: “Shipping is doing its best to live up to its reputation as a highly cyclical industry. Confidence has fallen to its lowest level for two-and-a-half years, having been at its highest for six years in first-quarter 2014. A year is a long time in shipping.
“Overtonnaging is not so much the elephant in the room as the room itself. It is a major factor in the collapse of freight rates. Elsewhere, everything from continuing problems in the world economy to the imposition of sanctions (most recently those involving Russia) has helped neither the confidence nor the performance of the markets.
“None of this will be news to those experienced industry players who, to varying degrees, have seen tough markets before and who will find the wherewithal and the patience to ride out the current difficulties. It is less certain whether others will be able, or willing, to hold their nerve so well.”