Shipping confidence hits three-year high

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Shipping confidence reached its equal highest rating in the past three years in the three months to end-May 2017, according to the latest Shipping Confidence Survey from Moore Stephens.

The average confidence level expressed by respondents to the survey was up to 6.1 out of 10.0 from the 5.6 recorded in the previous survey in February 2017. Increased confidence was recorded by all main categories of respondent to the survey, which launched in May 2008 with an overall confidence rating of 6.8.

In the case of brokers, the confidence rating rose from 4.6 to 6.4, while for owners the increase was from 5.6 to 6.1. Confidence on the part of charterers and managers, meanwhile, was up from 5.9 to 6.4, and from 6.0 to 6.2 respectively. Confidence levels were unchanged in Asia at 5.6, but up in Europe, from 5.5 to 6.2, and in North America, from 6.1 to 6.4.

A number of respondents expressed cautious optimism about the industry's fortunes over the next 12 months, based largely on perceived increased levels of ship demolition and a rationalisation of over-ambitious newbuilding plans. This helped increase expectations of major investments being made over the next 12 months. Concern persisted, however, over political uncertainty, overtonnaging in certain trades, depressed oil prices and a potential dearth of quality seafarers.

"Shipping people are eternally optimistic, with one week of good news seeming to help them forget eight terrible years of hardship and financial loss," said one respondent.

The likelihood of respondents making a major investment or significant development over the next 12 months was up from 4.9 out of 10.0 in the previous survey to 5.4, the highest level since August 2014. There was increased confidence on the part of all major respondents, in the case of charterers up to a level of 6.3 from 5.8 in February 2017. Owners and managers, meanwhile, each registered a confidence level of 5.9, up from 5.1 and 5.6 respectively last time. Confidence on the part of brokers was up from 3.4 to 4.4.

50 per cent of respondents expected finance costs to increase over the coming year, compared to 54 per cent in the previous survey. Owners' expectations fell from 57 per cent to 48 per cent, while managers were also down, from 61 per cent to 57 per cent. More brokers and charterers, however, anticipated costlier finance – 63 per cent of brokers (against 41 per cent last time) and 57 per cent of charterers (compared to 47 per cent in February 2017). "The financial support needed to boost the markets is not yet at expected levels," noted one respondent, "but we believe that the situation will improve in the coming months as demand increases."

Demand trends, cited by 26 per cent of respondents, continued to be the factor expected to influence performance most significantly over the next 12 months, followed by competition (22 per cent) and finance costs (14 per cent). According to one respondent, "Larger companies are targeting their smaller competitors in order to minimise competition and secure a stronger position in the market."

The number of respondents expecting higher freight rates over the next 12 months was up on the previous survey in all three main tonnage categories. In the tanker market, 32 per cent of respondents anticipated improved rates, as opposed to 25 per cent last time, while the number anticipating lower tanker rates fell from 28 per cent to 16 per cent. Meanwhile, there was a 14 percentage-point rise, to 58 per cent, in the numbers anticipating higher rates in the dry bulk sector, the highest figure for three years.

In the container ship sector, the numbers expecting higher rates rose from 31 per cent to 46 per cent, while there was a six percentage-point fall, to 12 per cent, in those anticipating lower container ship rates. Net sentiment was up in the tanker market from -3 in February 2017 to +16 this time, while the increases in the dry bulk and container ship trades respectively were from +33 to +50 and from +13 to +34.

In a stand-alone question, respondents were asked to estimate the level they expected the Baltic Dry Index (BDI) to be at in 12 months' time. More than half (52 per cent) felt the BDI would reach a level of between 1,000 and 1,499, while a quarter (25 per cent) put the likely figure at between 1,500 and 1,999. "Healthy volumes of cargo are being moved," said one respondent, "but there are too many ships around."

"The survey was launched in 2008, on the very cusp of one of the most protracted and severe global economic downturns, with a confidence rating of 6.8. In our latest survey, the figure stands at 6.1 which, given geopolitical, economic and industry developments, must be seen as a robust rating," commented Richard Greiner, Moore Stephens Partner, Shipping and Transport. "Moreover, confidence today of making a major new investment is the highest it has been for almost three years. The positive sentiment on freight rates is welcome, although this must be weighed against the lows to which they have fallen and from which they must continue to recover.

"Even for an industry which is familiar with the volatile nature of international commerce, shipping's ability to survive adversity is worthy of comment. Our latest survey found many of our respondents in watchful mode, mindful of the fact that there are still too many ships, but encouraged to believe that increased demolition and more pragmatism by industry stakeholders will help to redress this imbalance. Respondents also remain cognisant of the impact which geopolitical developments can have on shipping, and it will be instructive to see what effect all this will have on industry confidence in our next quarterly survey."

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New vessel acquisitions boost Gibraltar’s maritime security

The small British territory of Gibraltar, situated on a narrow peninsula of Spain's southern Mediterranean coast, relies upon four forces for its maritime security. These are the Gibraltar Squadron of British Royal Navy (RN), and the marine units of the Gibraltar Defence Police (GDP), the Royal Gibraltar Police (RGP) and Her Majesty's Customs Gibraltar (HM Customs Gibraltar).

Core RN units are the 16-metre, 32-knot fast patrol boats Sabre (ex-Grey Wolf) and Scimitar (ex-Grey Fox). These 1980s-vintage, Halmatic-built craft were, until 2002, deployed on Lough Neagh, Northern Ireland, and manned by Royal Marines.

Both vessels are armed with two machine guns, fired from armoured stern mountings.

Patrol vessel Scimitar. Photo: Ministry of Defence

Earlier this year the RN confirmed that Sabre and Scimitar will be replaced in 2019 by a pair of newbuild, larger, faster and more heavily armed vessels. No further information has been released. There are, though, strong, but unconfirmed, rumours in the defence world that the replacement craft are to be supplied by fast boat specialists Safehaven Marine of Ireland.

There is also some speculation that the rumoured contract might be linked to a prospective order for a multi-role ship for the Irish Naval Service. (British yard Babcock Appledore is currently working on the sixth in a series of offshore patrol vessels for this service, while Safehaven, for its part, recently supplied the RN with a small catamaran survey vessel.)

Late last year the GDP took delivery of three new 40+ knot GRP interceptor craft.

The hulls of all these boats were built by Tampa Defence of the USA, with the craft being customised for a police role by South Boats of UK. Abraham Attias is an 11-metre, fully enclosed boat, powered by three 300 horsepower petrol outboard motors

The semi-open Charles Curtis has a length of 13.4 metres, and is powered by twin inboard diesels, linked to surface piercing propellers while the 12.2-metre, fully enclosed, Stephen Mckillop features twin inboard diesels, linked to waterjets.

These new boats are all fitted with radar, thermal imaging and low light TV cameras, as well as shock-absorbent seating.

Royal Gibraltar Police Patrol Vessel Sir William Jackson. Photo: Tonyevans gi

In 2013 the RGP commissioned the 25-metre, 28-knot, RHIB-equipped patrol vessel Sir William Jackson. Constructed by Technomont of Croatia, this vessel, prior to entering Gibraltar service, was a British fisheries patrol vessel. It was refitted in UK prior to delivery for its new police role.

2015 saw Sir William Jackson being joined in RGP service by another similar Technomont-constructed craft, namely the purpose-built Sir Adrian Johns.

HM Customs Gibraltar Boats

Also in 2015, the then newly formed marine unit of HM Customs Gibraltar took delivery from Italian builders Fabio Buzzi of two 60-knot, structured foam–constructed, 10.4-metre RIB fast pursuit and interception craft. The enclosed, offshore-capable, Searcher features a galley, toilet and air conditioning, and is powered by three 300 horsepower engines. The open-topped Seeker is powered by two such engines.

Both craft are fitted with radar, thermal imaging, and low light TV.

The Gibraltar maritime scene is a complex one, and the territory's increasingly well-equipped waterborne forces, which also include some older patrol craft and numerous RHIBS, can look forward to a busy future. Operational challenges include countering large scale smuggling, as well as territorial incursions by Spanish naval and paramilitary vessels, and conducting search and rescue operations. Also, the nascent threat that Gibraltar will, like Spain's North African enclaves, become embroiled in the massive unauthorised efflux of people from Africa, also looms increasingly large.

TREVOR HOLLINGSBEE



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