Shipping industry confidence is at its lowest level for 3 1/2 years, as fears about overcapacity and the global economy reach new heights, according to IFW , an international freight and logistics news service.
According to the latest quarterly Moore Stephens Shipping Confidence Survey,
the average confidence level expressed by respondents in August was 5.3, on a scale of 1 (low) to 10 (high), compared with 5.6 in the previous survey taken in May. This is the lowest figure recorded since the survey was launched in May 2008 with a confidence rating of 6.8 – the highest rating so far. The survey includes responses from key players worldwide in the international shipping industry, IFW reported.
Confidence over the three-month period covered by the latest survey fell most noticeably among ship owners, down from 5.8 to 5.1, the lowest owner rating recorded during the life of the survey. Confidence on the part of managers fell from 5.8 to 5.6, while brokers held on to their already comparatively low rating of 5.1.
“Until recently, things looked quite optimistic, but recent doubts over U.S. loan credibility and EU financial worries have severely dented confidence,” one survey respondent said. Other respondents referred to “the most unpredictable period since the beginning of the global financial crisis” and suggested that the market was “back to levels last seen in 2001.”
Few said they could see any short-term solution to the difficulties, according to the IFW report .
Overcapacity was also a recurrent theme among shippers. “Markets are at rock-bottom,” said one respondent, adding: “And [they] will stay there for some time because of the large number of new vessels due to come into service. Older vessels and speculative investors, as well as low-grade operators, will have to disappear before the situation can start to improve.”
“The drop in shipping confidence to a record low is a disappointment,” said Moore Stephens shipping partner Richard Greiner. “But it has been coming. Given what has been happening in the world, and in the industry, confidence remained surprisingly high last year, but started to slip in 2011. Indeed, in many ways, it is back to the levels of two years ago.”
