International accountant and shipping adviser Moore Stephens expects optimism to triumph over pessimism in the shipping industry during the next twelve months.
Writing in the latest issue of Bottom Line, the newsletter of the Moore Stephens shipping industry group, partner Richard Greiner said the industry has ended 2017 in a more optimistic mood than it closed the previous year.
"Overall industry confidence hit a three-year high in 2017. Oil prices reached a three-year peak, while there was a 50 percent 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," added Greiner.
"In 2018, freight rates will harden if there is a further reduction in tonnage overcapacity and an 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."
According to Greiner the uncertainty surrounding the UK's vote to leave the European Union will continue to fuel pessimism and optimism "in more-or-less equal measure," while smart technology will assume increasing importance; doubts about the sufficiency of low-sulphur fuel will persist; and gas will become an increasingly attractive option for powering tonnage as the price of oil recovers.
"If there were no pessimists, there would be no optimists," concludes Greiner. "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 shipping industry."