Xu Zunwu, vice chairman and general manager at the state-owned bulk shipping arm of Cosco, noted that the overcapacity problem remained “glaring” but the sector has probably hit a cyclical trough, putting recovery on the queue even if it is still some years away.
“Over the next two to three years, the health of the dry bulk shipping industry will hover at around the same level before the start of a slow recovery over three to four years,” Xu told delegates at the World Shipping (China) Summit 2013 in Ningbo on Wednesday.
Xu negative forecast contrasts to some other players in the market such as Precious Shipping managing director Khalid Hashim who said recently recovery come as early as the first half of 2014.
The dry bulk sector today has seen vessel capacity growth surged by 80% since 2007, far outpacing demand growth of 30% during the same period, Xu pointed out. He urged dry bulk owners to focus on optimisation of their fleet structure to trim excess capacity and reap energy efficiencies in view of high and rising bunker fuel prices.
“The recovery for dry bulk shipping, when it comes, will be very fragile. There will be a need for self-discipline among owners and a sense of shared responsibility, especially when it comes to buying new ships, if we are to see a sustainable market recovery,” Xu commented.
He further urged owners to compete in the market based on customer services such as offering bulk cargo logistics solutions, rather than fleet capacity expansion.
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