According to Moore Stephens analysis
Overall confidence levels in the shipping industry held firm over the three-month period to August 2013, maintaining the highest level reached since November 2010, according to the latest Shipping Confidence Survey from international accountant and shipping adviser Moore Stephens. Doubts persist, however, over the level of excess tonnage and the resultant effect on freight rates, while there is growing concern over the increasing cost of regulation.
In August 2013, the average confidence level expressed by respondents in the markets in which they operate was 5.9 on a scale of 1 (low) to 10 (high), identical to the figure recorded in the previous survey in May 2013. This is the highest figure since the 6.0 recorded in November 2010. The survey was launched in May 2008 with a then confidence rating of 6.8.
Charterers’ confidence reached a three-year high, up from 5.5 to 6.3, equalling the all-time survey high for charterers. Confidence was also up for owners, from 5.7 to 5.8, the highest figure since May 2011, and for managers, from 6.0 to 6.2. Confidence on the part of brokers remained unchanged at 5.9. Geographically, confidence was up in both Asia (from 5.8 to 6.1) and Europe (from 5.8 to 5.9), and unchanged in North America at 6.0
There was a theme of quietly returning confidence running through the comments of a number of respondents.“There is a feeling of optimism and the sense that we have turned a corner, with supply and demand expected to come into balance,” said one respondent. Another noted,“The market is waking up, and more opportunities will appear in the near future,” and another still that, “The shipping market is very competitive and constantly evolving, with more and more new players entering the industry as the demand for shipping cargo by sea continues to increase.”
Elsewhere it was noted,“The shipping industry is seemingly moving towards a positive place, albeit slowly,” and, “The shipping market is on the rise, and will continue on that path.” One respondent said,“A shrinking orderbook, combined with the anticipated US and European economic recovery, should help to increase demand in 2014.”
Not everybody was so confident, however, with one respondent going so far as to say,“We have never known a period in shipping where the uncertainty factor has been so high in so many areas.” Another said, “Looking at the moves of some of the major players, we have to ask whether we are all blind or just plain ignorant. The rest of us will be paying for a handful of greedy CEOs who hide behind their number-crunchers who make everything look bright and shiny.”
Another respondent observed,“Some niche markets are showing definite signs of a boom, but others are still in decline. Any overall recovery is still at least another two years away. Managing to survive the last five years is no guarantee that a company will survive the next five.” Elsewhere it was noted that the abiding message must be, “Consolidate, consolidate, consolidate!”
A number of respondents expressed continuing concern about overcapacity.“Our biggest fear,” said one, “is that the financial markets will enter the shipping sector and start ordering new vessels again before moderate growth and scrapping volumes have had time to absorb excess tonnage.” Another said,“We are already worrying about the market from 2016 onwards because too many newbuilding orders are being placed on pure spec.”
