Every year about this time an analyst, consultant, or some other paid shill serving the ship owners, will come out with a glowing forecast for the upcoming year, and of course, they’re always wrong. It’s happened in the past half dozen years and it’s happening again. This time Moore Stephens is the designated hitter. Here’s the January 14th prediction as seen in Port Technology:
“The shipping industry’s fortunes should be noticeably improved by 2015 according to international accountant and shipping advisor Moore Stephens. But the company warns that the prospects for recovery may still be fragile if the industry fails to meet a number of challenges, including tighter regulation and increased operating costs.
“‘The shipping industry can afford to be a little more bullish than previously in its aspirations for 2014,’ said Moore Stephens shipping partner Richard Greiner. ‘Shipping is in a different space to that which it occupied a year ago. Confidence rose to a three-year high over the course of 2013. Good things are predicted for freight rates in 2014, more companies are starting to consider new investment, and economic issues with the potential to hurt shipping are deemed less severe than 12 months previously’
“Moore Stephens predicts that over the next 12 months, more shipping money will be raised in the public and private equity markets and supply and demand levels should come closer into alignment.
As a result, freight rates are likely to rise and with them, vessel values with increased levels of demolition required to offset new tonnage …
“He warned, however, that ‘all the positive indicators remain somewhat fragile. Operating costs are expected to go up in 2014. Shipping cannot operate without fuel and skilled manpower. Meanwhile, increased regulation of crew welfare, fuel quality and ballast water management are big-ticket items,’ he said. ‘Environmental regulation is self-perpetuating, witness the news that IMO is to debate plans for ship owners to compile fuel-consumption data to support steps to create carbon dioxide reduction regulations.'” –
Did you ever read such a brazen con job? The industry is begging for investors to save their bacon, and Moore Stephens, among others, knows that without “new investment” the industry could go South, and take their lush tub-thumping fees with them.
InforMare gave us the real scoop last week. “Worldwide,” the service reported, “the total number of idle containerships bigger than 500 TEU stood at 235 units with an aggregate capacity of 779,230 TEU at the end of 2013. The container shipping market will have to make room for a record 1.6 million TEU of new capacity due to arrive in 2014.”
Make room? How? Simple. Idle another 1.6 million TEU with the 779,230 TEU already idle.
Is that an indicator of profitability, or what?