Dive Brief:

• Moore-Stephens, a UK based accounting and advisory committee ranked shipping industry confidence at 6.1 out of 10 in a new survey in late May, from a previous high of 5.6 in February, American Shipper reported Wednesday.
• The number of survey respondents expecting higher rates within the next year rose from 31% to 46%. Formerly, 18% expected lower containership rates; but that number has sunk to 12%.
• The eagerness with which the shipping industry sought to declare itself healthy was evident this spring, when Maersk CFO Jakob Stausholm told the Wall Street Journal that the worst of the downturn had passed.  As heavy scrapping and decreased port calls among the new alliances were now in place, those within the industry were clearly hopeful. 

Dive Insight:

According to the survey, many believe the shipping industry is on the upswing. First quarter freight rate results for Maersk were 4.4% higher than in first quarter 2016. As a result, Maersk hopes to increase its 2017 profits by $1 billion dollars over that of 2016. Also optimistic are industry experts at Xeneta, who predict that container carriers focused on the Asia-Europe trade route have a strong probability of success in coming months, thanks to sizeable increases in long-term contract freight rates, which in May, stood at $1,396 for a 40 foot box out of a Chinese main port to Northern Europe — 120% more than was charged in May 2016. 

The higher rates clearly demand more from shippers spoiled by artificially low prices thanks to an over-crowded market, yet realizing that the industry is in recovery should make it worth the price. As the shipping industry continues to consolidate and improve, more shippers may trust the industry as a reliable carrier method, which may also increase profit margins for carriers.