German lender HSH Nordbank has carried out a survey titled “Shipping companies 2014 – Fit for the future?” which shows that the confidence among shipping companies in the industry continues to grow in 2014, as a clear majority of companies expect increased turnover and more than 40 per cent expect higher profits in comparison to the previous year.
The report, based on a survey of HSH Nordbank customers, provides a picture of sentiment of the present state of the shipping industry.
Some 51 German and international shipping companies participated in the survey, which was conducted in the second quarter of 2014.
It is noticeable that the expectations of German and international shipping companies concerning profits differ.
German companies take a far more cautious view than their international competitors.
Only around one-fifth of German companies predict increased profits in 2014 while, in contrast, 57 per cent of the international companies predict increased profits.
” All companies agree that the greatest market opportunities exist for smaller units up to 4 000 TEU (20 foot standard containers) and for very large container ships of over 12 000 TEU.”
Despite the present surplus capacity, shipping companies are focusing on further expansion of their fleets.
“Almost 70 per cent of respondents stated that they want to increase the size of their fleet in the next three years,” said Christian Nieswandt, Global Head Shipping Domestic Clients/Global Liner & Container Finance at HSH Nordbank.
The majority of international (63 per cent) and German (47 per cent) shipping companies are striving to achieve growth in the bulk carrier segment in particular.
“Our findings for the container segment are striking,” said Nieswandt . “Despite the acknowledged surplus capacity over half of the German shipping companies we interviewed want to further expand their container ship fleets.”
International shipping companies are significantly more cautious in this market segment, with only 13 per cent planning expansion.
Respondents also estimate that charter rates for bulk carriers in particular will develop positively.
The survey indicates that a wave of new construction can be expected, which will further exacerbate the problem of surplus capacity.
Respondents believe that the greatest surplus capacity exists in the container vessel segment, in particular in the size range from 4 000 to 8 000 TEU.
“Two-thirds of the companies expect a wave of consolidation, particularly in the container shipping segment,” said Nieswandt.
The objectives in this regard are to create larger companies, for example via fusions, thus facilitating more competitive corporate structures.
To this end some 40 per cent of respondents have already held meetings to discuss possible M&As (Mergers & Acquisitions) in the role of the acquiring company.
47 per cent of German shipping companies are doing so, significantly more than among international companies (37 per cent).
In order to meet the future challenges facing the shipping industry just under half of international companies are focusing on retrofitting, that is re-equipping their fleets to achieve greater energy efficiency and meet present environmental standards.
[mappress] Press Release; July 24, 2014; Image: Maersk