2010 a year with opportunities in shipping for those with cash
Thursday 18. februar 2010 19:02
INTERNATIONAL: Despite the pressure of increased environmental compliance, 2010 will be a good year for anyone in the shipping industry with cash and access to finance, says leading shipping accountant and adviser Moore Stephens.
Writing in the latest issue of the firm’s shipping newsletter, Bottom Line, Julian Wilkinson, head of the Moore Stephens Shipping Industry Group, says, “For the first time in a decade, shipping bankers can get a decent and certain return on their dollar. Credit is restricted, loan pricing is up strongly and no banker now has to look for an excuse to turn away marginal business. Stronger clients and higher margins point towards happier bankers, even more so where the banks foreclose on the weakest borrowers.
“In the shipyards, the shortage of credit is being used by shipowners to push back delivery dates and renegotiate contracts. The effect is less profound in China, where Chinese banks and the government are taking up the slack. The big European yards are expecting big cruise orders, as the global economy begins to look up. But in the world’s leading shipbuilding nation, South Korea, we may see mass lay-offs if work dries up.
“Most shipowners, meanwhile, expect tough markets for the next year. But a growing global economy, booming scrapping and a fast-diminishing orderbook-overhang may mean that the markets will be less tough than expected. Combine that with record low global interest rates, and things don’t look too bad for owners who are not over-extended.
“Shipping is already the greenest of all forms of transport. Globally, it is much greener right now than it has ever been, as a large proportion of the fleet is going into lay-up, the scrapping of old tankers is reaching record levels, and those ships still working are doing so at slow and very economical speeds. But this year shipping will see more green costs forced on it. IMO will act slowly, and it will be some time before we see a shipping carbon tax or trading scheme. There are already pressures from charterers, however, to measure the green performance of ships, because they want to be able to tell the end-consumer how green their supply chain is. The result will be that older and less fuel-efficient ships will find it harder to get charters, and will face lower rates, while forward-looking owners will have to invest in a green agenda.
“2010 will be a tough year for shipping, and toughest of all for the yards. But it will be a year of opportunity for anyone with cash and access to finance, as they pick up cheap assets from failing projects. And it will also be the first year in which we will see a new kind of shipping finance, as cautious but forward-looking bankers begin to enquire about the environmental performance of ships and companies they are being asked to fund. Then we shall see a lot of people going green, and those without access to credit looking green with envy at those who have it.”
About:
Moore Stephens LLP is noted for a number of industry specialisations and is widely acknowledged as a leading shipping and insurance adviser. Moore Stephens LLP is a member firm of Moore Stephens International Limited, one of the world's leading accounting and consulting associations, with 630 offices of independent member firms in 98 countries, employing 20,864 people and generating revenues in 2009 of USD 2,078 mln.
