Overcapacity, high oil plunge shipping mood to new low: Moore Stephens

LONDON`s Moore Stephen accounting firm says confidence in the ocean shipping business prospects has declined a fourth consecutive quarter, ending in May, its lowest level in two years.

"Freight rates are low and fuel costs are high, so confidence is low," one respondent told the Moore Stephen survey team.


In container shipping, 42 per cent of respondents, against 49 per cent in February, expected freight rates to rise in the next year. Shipowners expecting an increase was down from 56 per cent February to 40 per cent in May while charterers expecting a rise were down to 29 per cent from 40 per cent.


Overcapacity was cited as the big cause with rising oil prices running a close second, uniformly expressed by all shipping sectors, according ot the firm`s latest survey, reported Newark`s Journal of Commerce. Average confidence levels was 5.6 on a scale of 1 - 10 with 10 being the higest level, against a 5.8 in February, the lowest reading since the 5.5 posted in May 2009.


Charterers posted the lowest readings, 5.8 to 5.4, followed by managers, 6.0 to 5.8 and brokers. Confidence was lowest in Europe, falling from 5.6 to 5.5, but Asia recorded a bigger drop, 6.0 to 5.7.


"Increases in the price of diesel have a very negative influence on our trades," noted one respondent, "and if they continue the consequences will be catastrophic."