LONDON • Global shipping confidence is at an all-time low as fears of a global recession and Britain's vote to leave the European Union pile pressure on parts of the industry already suffering from its worst downturn, a leading transport survey showed yesterday.
The global container sector, which transports everything from bananas to iPhones, and the dry bulk shipping market, hauling commodities including iron ore and coal, are struggling with a glut of ships, a faltering global economy and weaker consumer demand.
In an annual survey by international law firm Norton Rose Fulbright, just 15 per cent of respondents saw current market conditions as positive, the lowest level since the poll began in 2009, with shipping the gloomiest transport sector canvassed.
Separately, 68 per cent said a global recession posed the greatest threat to shipping in the coming years, compared with 38 per cent who saw this risk in aviation and 20 per cent in rail.
"The (shipping) industry is currently in the grip of the worst recession in living memory and, while most of our respondents envisage an upturn in freight volumes in the next five years, any major economic shock would further exacerbate an already fragile industry," Norton Rose Fulbright's global head of transport Harry Theochari said.
"The UK's vote in favour of Brexit has meant that ship owners are likely to be assessing how it impacts their various regulatory obligations and their access to finance in a key shipping finance market," he added, referring to the City of London.
Shipping faces a global funding black hole, estimated at US$30 billion (S$41 billion), caused in part by banks cutting lending to the sector.
"Bank debt is expected to remain the industry's principal source of funding although, for many ship owners, funding remains thin on the ground," Mr Theochari said.
The poll of 200 respondents in the transport sector - including firms, financiers and government entities - noted rail and aviation prospects were better, partly due to lower oil prices and more funding.
Mr Theochari said sentiment is high in aviation and rail, but "shipping continues to feel the effects of overcapacity in many markets, and an increase in enforcement actions is widely predicted".