Moore Stephens: 2015's Fragile Shipping Industry Could See More Companies Follow OW Bunker into Bankruptcy

Richard Greiner is a shipping partner with Moore Stephens

The shipping industry has started 2015 with confidence in a "fragile state", and an outlook of uncertainty and volatility could potentially send a number of companies along the same path of bankruptcy as failed fuel supplier OW Bunker, according to Moore Stephens shipping partner Richard Greiner. 

He urged the industry to adopt a "can-do attitude", saying it needs to "accept the things it cannot change, to change the things it can change, and to make sure it understands the difference between the two."

Greiner noted that shipping confidence started 2014 on a six-year high, but the year ended on a two-year low.

"It is difficult to predict with any certainty what the next 12 months will bring, beyond further uncertainty."

The coming year will provide hurdles such as tightened Emission Control Area (ECA) regulations, along with overtonnaging weighing down freight rates. 

Meanwhile, he said that scrapping was not occurring as fast as needed, an aspect that shippers needed to change. 

In addition, "there will be increased interest in risk management, without which there will be still more newbuilding disputes of the type currently sitting on the desks of arbitrators, and more companies following the unhappy route into bankruptcy taken at the end of last year by OW Bunker," he said. 

However, Greiner said that the industry should keep a positive mindset, avoiding the pitfalls of setting low goals that are too easily achievable. 

"It should not underestimate its proven ability to endure throughout crises," he said. 

Late last year Moore Stephens released its shipping confidence survey noting that Asia and Europe seemed to be feeling market uncertainty the most.