The Danish Ship Finance has issued its latest Shipping Market report providing a review of the recent key developments in shipping market from January 2013 to May 2014.
According to the report, the shipping industry is undergoing a process of transition driven by a combination of technological advances related to fuel efficiency and environmental requirements. It is expected several shipping segments to face significant headwinds from future supply until a new balance between supply and demand has been established. Freight rate volatility may intensify in this period and older vessels are expected to be scrapped prematurely in several segments. Secondhand values are expected to mirror the market fragmentation between fuel efficient vessels and older vessels. Older vessels may face unusually high value depreciations. These extraordinary changes represent not only a threat, but also an opportunity for the shipping industry.
The repercussions of the financial crisis are slowly diminishing and the recovery is taking hold in advanced economies. But it seems inevitable that the costs of the crisis have been high. In combination with an ageing population, the structural issues related to high unemployment, low investments, persisten output gaps, tight credits and large levels of debt have lowered the future
