The latest quarterly shipping survey by accountancy and advisory firm Moore Stephens for the period to the end of May 2011 showed confidence in the sector had fallen for the fourth successive quarter and was at its lowest since May 2009.
"It is disappointing to find that confidence in the shipping sector has dropped to a two-year low," said Moore Stephens shipping partner Richard Greiner.
"Once again, it was the threat to profitability posed by overtonnaging which most frequently exercised the minds of those who responded to the survey. Only time will tell how this will play out."
Greiner said the rise in fuel prices was also a major focus for those canvassed.
"Depending on which reports you read, and where in the world you bunker your ships, fuel prices have gone up by around 50 percent over recent months," Greiner said.
"It will take a lot of slow steaming, if indeed that is the answer, to address this particular issue," he said referring to a method where ships reduce fuel consumption due to slower speeds employed.
Using a scale of confidence from 1 up to 10, the May survey was 5.6, down from 5.8 in the previous survey in February.
Confidence was lowest in Europe, falling to 5.5 from 5.6, but Asia recorded a bigger drop to 5.7 from 6.0.
The poll canvassed 511 participants, included ship owners, charters, brokers, advisers and managers.
Confidence was at the third lowest level since the survey began in May 2008.
Moore Stephens said the mood among respondents was "noticeably downbeat".
"The key word for most companies right now is 'survival'," said one respondent.
A number of respondents expected the slump in confidence to persist for some time.
Those expecting tanker rates to rise over the next 12 months fell to 44 percent from 46 percent in the previous survey.
Some 37 percent believed dry bulk rates would rise versus 38 percent previously. In the container shipping sector, 42 percent expected rates to rise, down from 49 percent.
"One thing that owners and charterers do currently agree on, however, is the likelihood of their making a major investment over the next 12 months," said Greiner.
"Now may be a good time to buy for those who can put the finance in place to fund a viable venture. We will see what our next survey brings. Three months is a long time in shipping." (Reuters)
