Based on the facts like industry confidence, oil prices and rise in the
Baltic Dry Index, Moore Stephens argues that optimism will outweigh pessimism
for shipping in 2018; the other factors
that mattered are finance availability
both within and outside the industry; the sane status of newbuilding orderbooks
and charterers’ appetite for new investment. The text of the release is
delightful with a delicate sense of humour, something rare in a commercial
statement. The release is as follows:
It is expected that optimism is likely to triumph over pessimism in the
shipping industry during the next twelve months, says a release from Moore
one of the world's major accounting and business advisory networks providing
audit, tax, consultancy and financial services across the globe.
According to a recent study, pessimists live longer than optimists, and
shipping is short of neither. But the industry has always valued longevity as
well as new blood, and it certainly ended 2017 in more optimistic mood than it
closed the previous year.
Oscar Wilde said “It is always best to borrow money from pessimists, because
they won’t expect it back.” But there was no shortage of people lending money
for sound business deals in shipping last year in the firm belief that that
they will get it back – and not without good reason.
Overall industry confidence hit a three-year high in 2017. Oil prices reached a
three-year peak, while there was a 50% rise in the Baltic Dry Index over a
six-month period in the second half of 2017. Finance was available from within
and outside the industry. Some sanity returned to the newbuilding orderbooks,
and charterers in particular displayed an appetite for new investment.
In 2018, freight rates will harden if there is a further reduction in tonnage
overcapacity and acceleration in ship demolition. Money will still be available
for the right investment. Shipping will continue to be impacted by geopolitical
uncertainty, which could be influenced in either a positive or negative way by
elections in Brazil, Iraq, Italy, Mexico, Russia and elsewhere.
US interest rates will most likely go up over the coming 12 months, and the
implications of new accounting standards will start to bite. Smart technology
will assume increasing importance, adding value and improving safety but
putting pressure on R&D budgets. Doubts will persist about the sufficiency
of low-sulphur fuel, and gas will become an increasingly attractive option for
powering new and converted tonnage as the price of oil recovers.
The riddle wrapped in a mystery inside an enigma which currently presents
itself as Brexit will continue to fuel pessimism and optimism in more-or-less
If there were no pessimists, there would be no optimists. Shipping remains a
vital global industry, carrying the vast majority of world trade while emitting
a lower per-unit level of harmful emissions than any other comparable form of
transport. In 2018, optimism can be expected to outweigh pessimism in the