Shipping Confidence Survey Averages at 5.9 on 10



In a survey conducted by Moore Stephens from International Accountant and Shipping Adviser, the overall confidence levels in the shipping industry has risen in the last three months of 2015.  The shipping survey is an ongoing process and was launched in May 2008 when the survey showed a confidence rating of 6.8.  In the May 2015 survey, the overall confidence about the Shipping Industry hovered at 5.3 /10, whereas, in August 2015, it shows an increased level of confidence rating at 5.9/10.

Responses were received from various categories of people linked with the Shipping Industry, such as Ship owners, charterers, brokers, advisers, managers and others in the UK, Rest of Europe, USA, Canada, Russia, China, India, Rest of Asia, Latin America, Africa and Australasia.  In each category, the confidence rating appears to have risen in comparison to the last few months of this year.

Responses were varied and it brought out the sentiments felt by various categories linked to different sectors of the shipping industry. The recurring topics of concerns by respondents (irrespective of their category) can be broadly classified as falling under these heads:

  1.  low freight rates,
  2.  over tonnage and oversupply in all sectors,
  3.  private equity funding and its impact in the long run,
  4.  Increased regulation,
  5.  non-traditional shipping sources.

The three most significant features that a majority of respondents felt, would influence the Industry’s performance were:

  • Competition
  • Demand trends
  • Finance costs

Respondents from all categories were uniformly optimistic in their response to the likelihood of their making a major investment or expecting significant development over the next 12 months.

Owners and charterers, in particular and roughly up to 48% of respondents expected costs to increase in the next 12 months.  Some felt, the global economic slowdown as a major factor for concern, especially in developing countries.

Most respondents did not anticipate higher freight rates in the tanker category of ships.  But, overall expectations for improved rates were anticipated in the dry bulk trades.  One respondent said, “We expect the tanker market to remain on a steady path over the next 12 months.”  Another respondent  expressed “significant concerns about continued oversupply in the dry bulk sector,” yet another response was, “Less ordering in the container sector, as a result of mixed/weak results will help to balance supply/demand going forward.”

Moore Stephens Partner from Shipping Industry Group Mr.Richard Greiner is quoted to have said: “It is always encouraging to see a graph moving in the right direction.  Perversely, the main reason for the improved level of confidence revealed by our latest survey may be the same as that which saw the industry’s perceived fortunes equalling a seven-year low in May of this year.  Volatility works both ways.”

Some respondents were concerned about the smaller players losing out to big companies.  It was counter-argued that smaller companies can survive, provided they have a sound business plan, they can identify a niche role in the market to add value and service superior to their bigger counterparts.

With the world population growing at this pace, it is expected to reach 10.9 billion by 2050.  This signifies a great potential for the Shipping Industry.  Geographically, confidence was up in Asia from 4.9 to 5.8, in Europe from 5.3 to 5.9, and in North America from 6.0 to 6.3.  The world GDP’s growth is predicted to climb to almost 4.0% by 2020.  This again is good news for shipping.

The WTO has forecast the world trade volumes to rise to 4% in 2016.  The overall world trade by sea route is significantly on the rise, and the long-term progress of the shipping industry looks positive.

Source: Moore Stephens


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