"In view of the unexpectedly long crisis, the German shipping industry is undergoing significant change," says Michael Behrendt, president of the German Shipowners Association (VDR), in its latest annual report.

"Smaller and medium-sized shipowners in particular are increasingly forming alliances and achieving success by raising joint financing and boosting their overall efficiency. For some, the issue is sheer survival," explained the former Hapag-Lloyd chairman.

The report states that a global over supply of cargo capacity continues to impede a sustainable recovery in freight and charter rates. Furthermore, the progressive depletion of shipping portfolios along with tougher ship financing requirements imposed by German banks have been tough challenges for shipowners.

The VDR statement comes hot-on-the-heels of a report published by the International Monetary Fund (IMF) claiming that bad loans in the shipping sector held by German banks pose a concern to the country's overall banking system, ahead of the European Central Bank's upcoming Comprehensive Assessment tests.

However, the VDR anticipates a recovery in the multipurpose vessel sector, claiming demand recovered towards the end of 2013 as the European economy stabilised. With hardly any smaller ships being ordered, the demand for larger units is growing.

The VDR report can be read in full here.