The shipping industry is expected to use a mixture of experience and innovation to navigate what is likely to be another volatile year for the industry in 2017, shipping adviser Moore Stephens said.
The oil prices should continue on an upward trend on the strength of the recent OPEC production cuts. Calls for higher levels of ship demolition are expected to increase significantly, although not ship demolition itself, Richard Greiner, Moore Stephens Partner, Shipping & Transport, said.
Additionally, the cost of meeting regulatory requirements should become clearer as the industry and its financiers grapple with the financial consequences of having to burn lower-sulphur bunker fuel whilst ensuring that their ballast water management systems are fit-for-purpose.
“Orders will be placed for new ships. If they are not, a number of shipyards will go to the wall. For many, freight rates will continue to struggle to reach the levels required to ensure commercial viability, while consolidation will remain the buzzword in the liner trades,” Greiner said.
If operating costs do not increase, Greiner said that concern will spread about whether quality and safety are being sacrificed.
Confidence in shipping increased steadily for most of 2016, underlining just how robust the industry can be in difficult times. The inherent volatility of the industry will continue throughout 2017, during which time shipping will resort to tried and trusted methods and to fresh innovation alike in an effort to keep its head above water.