Moody's Investors Service holds a negative outlook for the global shipping industry in 2017, reflecting the continued oversupply of ships and a 7-10 percent decline in earnings before interest, taxes, depreciation and amortization.
Container shipping companies will continue to face oversupply, and profitability could be put under even more pressure if bunker fuel prices increase, the credit rating agency said.
Since late 2015, the industry has had very weak freight rates, Moody's said, noting how the “sustainability and magnitude of recent rate increases remain uncertain.”
Moody's, which attributed the low freight rates to excess vessel and slot capacity across the fleet and a decline in fuel surcharges with the sustained lower costs of fuel, said it predicts “supply growth will continue to outpace demand growth and pressure freight rates.”
Bunker fuel prices will remain low, and Moody's believes operators will have difficultly passing on higher fuel costs in an over-supplied market.
Read more: http://www.americanshipper.com/main/asd/moodys-holds-negative-outlook-for-global-shipping-66262.aspx