EDITORIAL COMMENT


Light at the end of the tunnel?


While confidence is at a low ebb, some believe that shipping will prove more resilient than other sectors to recession.


twelve months, according to the latest Shipping Confidence Survey produced by accountant and shipping consultant Moore Stephens. One year on from the first Moore


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Stephens survey, the average confidence level expressed by respondents, on a scale of 1 to 10, was 5.4, compared to 6.8 in the initial survey in February 2008. In the last four months, the average confidence level declined from 5.6 to 5.4, and was most significantly down amongst owners and managers, with the level falling to 5.4 in each category from previous levels of 5.8 and 6.0 respectively. One year ago, owners and managers recorded confidence levels of 7.1 and 7.2 respectively. Despite the drop in average confidence


levels, a number of respondents felt that things were likely to improve over the coming twelve months and beyond. Comments included: “As owners we have already touched the bottom, and I don’t believe we can go any lower”. Te survey also confirmed that there


are winners in every downturn. One respondent observed that, “Given what is happening with some Chinese yards at present, it would be no surprise to find that some builders may become owners and start operating the vessels they build”. Another observed, “We expect some real opportunities in terms of low-price, quality vessels”, while yet another said, “Cash-rich buyers will be looking at the


The Naval Architect April 2009


verall confidence levels in the shipping industry have declined by more than 20% over the past


bargains of the millennium come the summer.” Charterers were comparatively upbeat,


although the increase in confidence rating over that period to 5.5 (from 4.7) was still some way behind the 6.1 recorded twelve months ago. One respondent commented, “Charterers are playing now in the shipping market like a child plays with its doll.” Over the past twelve months, the


perception of those factors which most influence performance have changed significantly. One year ago, it was ship operating costs, crew supply and tonnage supply that led the way among respondents. In the latest survey, demand trends (27%), the cost and availability of finance (21%), and competition (20%) have now emerged as the three factors deemed most likely to influence performance over the coming year. Tere was a marked fall over the last four


months, from 60% to 47%, in the number of respondents who expected finance costs to rise over the next year. Tis compared to 56% in the Febraury 2008 survey. Te proportion of respondents expecting lower finance costs meanwhile rose in the last four months from 19% to 25%. Tere was a significant drop compared


to the last survey (from 52% to 40%) in the number of respondents who expected tanker rates to fall in the next twelve months. Tere was also a marked, if not altogether surprising, difference of opinion between owners (25%) and charterers (12%) in terms of those expecting rates


to increase. Twelve months ago, 62% of charterers anticipated that tanker rates would increase over the year. In the dry bulk market, there was an


appreciable increase over the last four months, from 35% to 46%, in the number of respondents predicting higher rates, but a significant fall (from 43% to 20%), in the numbers of those anticipating lower rates. Twelve months ago, 40% of respondents were anticipating lower rates. Tere was a clear disparity between owners and charterers and in the regions Europe led the way in terms of expecting higher rates, followed by Asia and North America. Finally, 36% of respondents to the


survey expected containership rates to be lower in twelve months’ time, compared to 50% last time, while the number anticipating higher rates in this sector rose from 20% to 23%. Moore Stephens shipping partner,


Richard Greiner says, “Given what has been happening in the world economy, the fall in confidence levels was to be expected. Perhaps the real surprise is that confidence levels have not fallen by even more. “Tere was evidence of optimism from


a number of respondents, even if much of it was predicated on the basis that things could hardly get worse. Examples include, ‘As soon as the financial markets stabilise, the shipping markets will be the first to respond’, and ‘Tere are clear signs that trade and shipping are picking up in some parts of the world’.” NA


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