Shipping horizon stays gloomy

Shipping companies expect conditions in the sector to worsen in the coming months with bank lending set to remain tight for at least 12 months, an industry survey showed.

Around 90 per cent of the world’s traded goods by volume are transported by sea and the international economic downturn has hit the shipping industry hard since October 2008.
A survey, convering 153 global respondents in the shipping sector, found 63 per cent of those polled saying widespread bank enforcement of troubled shipping loans.

"Unfortunately, major bank enforcements would appear to be inevitable as owners continue to struggle with the high finance costs of their assets in a collapsed market," the report said. Tougher action from the banks are likely in the last quarter of 2009.

The poll found that nearly 80 per cent believed that lending will not return to pre-crisis levels for three years, with 53 per cent expecting bank lending to only start increasing only after 12 to 24 months.

The pressures on the sector are expected to be compounded by an oversupply of ships, which will gather pace in the coming months.

The survey found that ship values will continue to drop for some time with 33 per cent expecting the lowest point to be reached only after six months, Exim News Service informs.

(Source: Transport Weekly)