Moody's Poor World Shipping Forecast for 2017

Moody 's Investors Service released a negative outlook for global shipping in 2017, driven mainly by continued oversupply of power transport vessels and a 7-10 percent decline in profits.

In particular, an oversupply of transport services will remain in the containerized sea freight market, and the profitability of shipping companies could be under great pressure if fuel prices rise.

Since the end of 2015, container transport has recorded very low freight rates, which is why their development remains uncertain. According to Moody's, this segment is also characterized by excess continuation of fleet capacity. Shipowners' problems could be exacerbated by rising fuel costs.

Overall, the agency estimates that this shipping segment cannot expect a lasting improvement in the situation in 2017, despite the consolidation process, which should reduce price competition.

In the segment of bulk cargo transportation by sea, freight rates will remain low in 2017 due to weak growth in demand. However, the delay in the delivery of new ships and the scrapping of old ones will help keep the loading of the world fleet under control, according to the agency.