Shipping Earnings Set to Slump


A new report from credit rating firm Moody’s Investors Service has said that the financial situation in the shipping sector is set to worsen, with shipping earnings expected to fall by a low single digit percentage, according to the Wall Street Journal.

The report said: “Capacity is already high, and we expect supply growth will continue to outpace demand growth by more than 2% in 2016, supporting the negative outlook on the segment.

“The existing supply-demand imbalance will persist over the coming 12 to 18 months.”

The dry bulk industry is also set to deteriorate over the coming years as a result of the decline in commodities prices.

Despite Moody’s forecast, it was previously reported by PTI that although spot rates still have a long way to go, they have improved on the major trade lanes in recent months.

Shippers recently expressed concerns with regards to the uplift in volumes, saying that they don’t expect to see an uplift in the Q3, 2016 peak season.

The industry is still grappling with overcapacity and low freight rates, however, ports and terminals are also struggling with higher peaks caused by mega-ships.

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