OVER 75% of shipping executives polled by Lloyd’s List during the Connecticut Maritime Association conference agreed that conditions in the global containership sector had yet to hit bottom.
The survey respondents included US and European shipowners, operators, regulators, lawyers, fund managers and bankers, and revealed an overwhelmingly negative outlook for the shipping sector.
The Lloyd’s List industry survey asked five questions related to major maritime issues as the industry grapples with what US commentators are now calling “the Great Recession”.
A majority of respondents thought that safety standards would slip because of the credit crunch, and also questioned banks’ commitment to shipping.
With freight rates slightly above breakeven levels for ships purchased and financed at the height of the boom, and with bulk carriers, containerships and gas carriers going into lay-up, there was widespread acknowledgement that owners will cut safety and maintenance corners to save money.
Nearly 87% of the 30 people who responded to the question agreed that the credit crunch threatened the maritime industry’s drive to improve safety standards.
Hopes that significant cancellations would help reduce the bloated bulk carrier newbuilding orderbook in order to improve freight rates are also low.
Less than 41% of the 32 respondents believed that bulk carrier newbuilding cancellations in 2010 would not exceed 60%.
These cancellation levels are among the most optimistic scenarios currently under discussion by owners and operators.
Just under two-thirds of the respondents said that banks would not remain committed to shipping.
There was little sign indication of relief for the global containerships fleet either. Just 26 of the respondents agreed that the container sector had yet to hit bottom.
A sharp contraction in global trade has seen port throughput in key US ports fall by more than 30% in the months of January and February.
But 78% of those executives surveyed believed the worst was yet to come.