Overall confidence levels in the ocean shipping industry dropped for the fourth successive quarter in the three months ended May, to their lowest level in two years, according to the latest shipping confidence survey by the accounting firm Moore Stephens.
The London-based firm said the threat posed by overcapacity in all shipping sectors was the single most dominant theme running through the responses to the survey, which also revealed a high level of concern about continuing rises in the cost of marine fuels.
In May 2011, the average confidence level expressed by respondents in the markets in which they operate was 5.6 on a scale of 1 (low) to 10 (high), compared to 5.8 in the previous survey in February 2011. This is the lowest figure recorded since May 2009, when confidence stood at 5.5.
Confidence fell most noticeably on the part of charterers (down from 5.8 to 5.4), followed by managers, down from 6.0 to 5.8, and brokers (5.2 to 5.1). Geographically, confidence was lowest in Europe, falling from 5.6 to 5.5, but Asia recorded a bigger drop in confidence this time (down from 6.0 to 5.7).
In the container ship market, all the indicators were down. Overall, 42 percent of respondents, as opposed to 49 percent in February 2011, expected container ship rates to go up in the next 12 months.
In the case of ship owners, the number of respondents expecting an increase was down from 56 percent to 40 percent, and charterers were thinking along the same lines (down to 29 percent from 40 percent last time).
Managers, meanwhile, remained unchanged at 47 percent. Geographically, expectations of higher box ship rates fell in Asia (from 47 percent to 41 percent) and in Europe (51 percent to 44 percent), while in North America the numbers were down from 40 percent to 32 percent.
The survey also revealed a high level of concern about rising fuel prices. “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.”
“Freight rates are low and fuel costs are high, so confidence is low,” another respondent emphasised.