Shipping firms brace for survival battle

This year will all be about survival for many shipping companies, a leading shipowner has warned.

Tim Huxley, chief executive of Wah Kwong Maritime Transport, said poorly performing shipping markets could result in further bank foreclosures on ship finance loans and charterers returning vessels to owners.

Several operators had already disappeared since the downturn in the shipping sector started in 2008 and others would follow.

"Sadly, we are still to lose some of the companies who have soldiered on, often being the victims of charterers who have returned the ships their owners thought were on secure charters but who have now simply got to the stage of running out of cash."

His views were supported by other shipping experts. Ravi Korivi, group managing director of Bernhard Schulte Shipmanagement, said: "If one looks at the container vessel market, there is large overcapacity. This is going to make it difficult for small operators."

Captain Firoze Mirza, managing director of Bernhard Schulte Shipmanagement in Hong Kong, added that present average daily charter rates for massive supertankers were around US$5,000, while actual operating costs were almost three times that amount.