Overtonnaging Key Challenge in 2015
Overtonnaging is top of the list of things which shipping can change in 2015, as the industry gears up to get to grips with the 2015 challenges, as explained by Moore Stephens Shipping Partner Richard Greiner.
Accelerated scrapping is needed, together with an acknowledgement that there are already too many ships on the market and that, absent some form of rationalisation, freight rates will not pay the bills, Greiner said.
According to him, shipping needs to adopt a can-do attitude in order to successfully meet the challenges which are likely to come its way in 2015.
Aside to overtonagong, the relentless march of regulation ranks high on the list.
In 2015 this will assume still more onerous proportions with the inception of new regulations governing Emissions Control Areas, and a further step towards ratification of the BWT Convention, Greiner adds.
“One area where shipping can demonstrate that it knows the difference between what it can and cannot change is in its attitude to private equity. Does private equity not know what the rest of us know, or does it know something the rest of us do not? Rather than bemoaning the short-term commitment of private equity, shipping should be looking to tick the boxes which attract such investors,” he said.
In addition, as operating costs go up in 2015, along with the cost of regulation, oil prices are likely to go up faster than freight rates over the course of the year as well.
Increased interest in risk management is also expected, without which there will be still more newbuilding disputes of the type currently sitting on the desks of arbitrators, and more companies following the unhappy route into bankruptcy taken at the end of last year by OW Bunker.
“The shipping industry is volatile, and will be looking for improved political stability and a stronger global economy. But it should not underestimate its proven ability to endure throughout crises. The biggest danger may lie not in setting the targets too high and falling short, but in setting the targets too low and achieving them,” Greiner concludes.
Source: Moore Stephens