World News
Shipping Industry Confidence Down
Confidence in the shipping industry was as low in the three months ended in August as it's been at any point in the past four years, according to U.K. accounting and consulting firm Moore Stephens.
With a glut of newbuildings coming onto the market and continuing concern about the global economy, the average confidence level of respondents to Moore Stephens' survey was 5.3 on a scale of 1 to 10, down from 5.7 in May.
The confidence level had risen for the past three quarters after previously hitting the 5.3 level in August 2011.
The biggest issues cited by shipping industry professionals for the coming year were demand trends, competition, and finance costs, but there was a 7 percentage point fall in the number of respondents who thought finance costs would increase over the next 12 months.
"The fall in confidence recorded in our latest survey is clearly a disappointment, but it cannot really be termed a surprise," Moore Stephens shipping partner, Richard Greiner, said in a statement.
"In some respects, shipping has been bucking the trend for the past twelve months, exhibiting increased confidence despite the effect on the industry of the political and financial woes in Europe and elsewhere, and the problems of overtonnaging and falling rates.
Respondents said they expect fuel to have less impact on their performance than in the past.
"Shipping is an industry which is often accused of undervaluing and underselling itself," Grainer said.
"There is a lot of empirical evidence to back this up, not least the over-simplistic but nonetheless powerful anecdote about the enormous gap between the cost of shipping brand-name trainers from the Far East and the retail price of those trainers in western markets."
The comments echo a recent statement by A.P. Moller-Maersk CEO Nils Anderson, who said shipping rates are falling too low to support costs in some cases, and that Maersk would raise its rates instead to avoid a price war.
Key Bunker Prices More
| VLSFO | MGO | |||
|---|---|---|---|---|
| $/mt | +/- | $/mt | +/- | |
| Singapore | 504.50 | 2.50 | 620.00 | 3.00 |
| Rotterdam | 456.00 | 1.50 | 621.50 | 2.00 |
| Houston | 476.00 | 7.00 | 624.00 | 1.00 |
| Fujairah | 496.50 | 2.00 | 713.00 | 2.50 |
| Global 20 Ports Average | 526.50 | 0.50 | 712.00 | 0.50 |
| Global 4 Ports Average | 483.00 | 2.00 | 644.50 | 0.50 |
| Global Average Bunker Price | 570.50 | 1.50 | 751.00 | 1.00 |
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