“Substantial oversupply will constrain freight rates for at least the next 18 months, particularly weighing on earnings in the dry bulk and crude oil tanker segments, while falling US crude oil imports and declining European demand are likely to depress seaborne deliveries,” said Marco Vetulli, vice President - senior credit officer in Moody's corporate finance group.
“We expect aggregate EBITDA in the global shipping industry to decline by around 5% to 10% in 2013,” he added.
Shipping companies with bigger exposures to the crude oil tanker segment and the dry bulk sector are more likely to be adversely affected by the negative trends.
Moody's does not expect to see a major improvement in the container segment's financial performance in 2013 as it is the most sensitive to bunker fuel costs, which are expected to stay high.
The container segment, however, has the potential to outperform other shipping sectors this year if players maintain market discipline through proactive fleet management such as laying up ships to reduce supply and control costs.
Market prospects should improve in 2014 as the volume of oversupply declines, Moody's noted. However, downside risks remain high as the global economic recovery appears to have lost momentum in recent months.
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