With a mixture of experience and innovatio[ds_preview]n the shipping industry will try to face the still up-to-date challenges in another volatile year, shipping advisory Moore Stephens thinks.
However, in a new market report, Shipping-Expert Richard Greiner Richard Greiner admits, that making predictions about the shipping industry would be as volatile an undertaking as the business of shipping itself. »Who, for example, predicted that the Baltic Exchange would be sold to Singapore? The same people, presumably, who foretold that Donald Trump would be elected president of the United States, that Britain would vote to leave the European Union, and that Leicester City would win the English Premier League. Yet it all happened in 2016«, he argues, adding »Predicting shipping’s fortunes in 2017 is as precise a science as foretelling the English weather. But some things are at least more likely to happen than not.«
Examples would be oil prices, which should continue on an upward trend on the strength of the recent OPEC production cuts. As well, calls for higher levels of ship demolition will increase significantly, although not ship demolition itself, the expert of Moore Stephens says. The cost of meeting regulatory requirements would become clearer as the industry and its financiers grapple with the financial consequences of having to burn lower-sulphur bunker fuel whilst ensuring that their ballast water management systems are fit-for-purpose.
»In common with other industries, shipping will be waiting to see whether Brexit really does mean Brexit. Orders will be placed for new ships. If they are not, a number of shipyards will go to the wall. For many, freight rates will continue to struggle to reach the levels required to ensure commercial viability, while consolidation will remain the buzzword in the liner trades.«
If operating costs do not increase, concern would spread about whether quality and safety are being sacrificed. Therefore, both traditional and »innovative sources« of funding would remain accessible to those with sound business plans.
According to Moore Stephens, confidence in shipping increased steadily for most of 2016, what for Greiner is a sign how robust the industry can be in difficult times. »The inherent volatility of the industry will continue throughout 2017, during which time shipping will resort to tried and trusted methods and to fresh innovation alike in an effort to keep its head above water. Shipping will find a way.«
