Shipping market confidence sinks to 7-year low

Confidence levels in the global shipping market have fallen to a seven-year low as a glut of cargo ships, weak freight rates and excess liquidity continue to batter the industry, a survey finds.

Overall confidence level fell to 5.3 on a scale of 1 to 10 in the three months to May, the lowest point since the survey was launched in May 2008 by Moore Stephens, a London-based consulting firm.

"Respondents complained predominantly about low freight rates and over-tonnaging, while some expressed continuing doubts about private equity funding," said the report that polled 261 respondents.

The Baltic Dry Index, which tracks the costs to ship dry commodities, sank to a new low in February. It saw a mild recovery over the past month, to 800 on Tuesday, still a far cry from the highs of more than 10,000 before the 2008 financial crisis.

Moore Stephens found a number of respondents still saw an upturn in the market as "some way off", with a liquidity glut caused by central banks' monetary easing measures a key hurdle to recovery as it adds to investment in new ships.

"Boom-bust cycles in the shipping industry usually last about seven years, which is sufficient time for any money lost to return to the market … But now, because of excess liquidity in the markets and low interest rates, there is a feeling that any recovery will be a very long time coming," the survey said, citing an unnamed respondent.