Shipping industry confidence is high


Confidence levels in the shipping industry were at their highest level for two and a half years in the three months ended May 2013.

The figures are according to the latest Shipping Confidence Survey from international accountant and shipping adviser Moore Stephens.

Despite doubts persisting regarding the availability of bank finance, the survey found evidence of increased enthusiasm for new investment.

However, freight rates in the dry bulk sector in particular are expected to come under more pressure over the next twelve months with respondents warning about the growth of the shipping fleet.

This is the third successive quarter an increase in confidence has been seen, though survey respondents said difficult issues are still to be resolved. Expectation levels in relation to rate increases were also down across all categories of respondent, most notably in the case of brokers.

“Despite increased scrapping, it is clear that there are still too many ships on the market. For as long as that situation persists, the freight markets will struggle to bounce back,” said Moore Stephens shipping partner, Richard Greiner, who also warned that more scrapping is needed with pulling the plug on newbuild activity not the way to resolve problems.

And he said more focus is also needed on risk management together with early identification of the need for restructuring.

“Shipping is in reasonably good shape, given the problems it is facing,” he said. “Indeed, it is difficult to think of another industry which is so capital-intensive in nature, so reliant on skilled personnel and so heavily impacted by competition, politics, risk, protectionism, and regulation, yet able to remain optimistic in the teeth of a global financial downturn.”

You can read the full report here

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