Impact of Brexit vote likely to be muted, but harder on box ships
SHIPPING executives and analysts paint a generally positive post-Brexit picture for crude and product tanker owners but are warning of negative implications for containerships and dry bulkers.
Overall, there is a strong potential for further constraints on capital availability for shipping, already a growing issue over the past year, which could further negatively impact depressed, capital-dependent sectors such as containers and dry bulk, said IHS Maritime Fairplay.
The Brexit vote represents yet another hit on European commercial banks, the traditional lenders to shipowners whose stocks have plummeted.
These institutions - already besieged by regulations - are likely to be even more reluctant to lend to shipping than they were before the Brexit vote.
This could hit depressed shipping sectors like dry bulk and containers hardest given that cash reserves have been whittled down by years of depressed rates and a rate recovery is still potentially years away.
Such owners require capital not for growth, but for survival - and financial unrest following the Brexit vote could cost them their lifeline.
Global trade is already lagging global GDP growth, and an economic slowdown in Europe could threaten to bring containerised demand growth into negative territory by lowering European demand for Asian containerised imports and negatively impacting US exports due to a higher US dollar.
For UK shipping, the impact will potentially be broad but not immediate. The key issues for UK shipping are visas and work permits, fiscal arrangements including tonnage tax, and naval collaboration within Europe to counter piracy and rescue of migrants.
Any change to visa and work permit rules could undermine London's status as a maritime services centre. Shipping companies need to be able to keep open, staff, and operate representative offices in the UK without punitive or restrictive measures.
Shipping in London is principally focused around services to the industry, such as legal, insurance, brokerage and provision of such services should not be directly affected by Brexit. But should Brexit result in the departure or geographical refocusing of major international banks and financial institutions, this could impact London's stature as an international shipping centre.
SHIPPING executives and analysts paint a generally positive post-Brexit picture for crude and product tanker owners but are warning of negative implications for containerships and dry bulkers.
Overall, there is a strong potential for further constraints on capital availability for shipping, already a growing issue over the past year, which could further negatively impact depressed, capital-dependent sectors such as containers and dry bulk, said IHS Maritime Fairplay.
The Brexit vote represents yet another hit on European commercial banks, the traditional lenders to shipowners whose stocks have plummeted.
These institutions - already besieged by regulations - are likely to be even more reluctant to lend to shipping than they were before the Brexit vote.
This could hit depressed shipping sectors like dry bulk and containers hardest given that cash reserves have been whittled down by years of depressed rates and a rate recovery is still potentially years away.
Such owners require capital not for growth, but for survival - and financial unrest following the Brexit vote could cost them their lifeline.
Global trade is already lagging global GDP growth, and an economic slowdown in Europe could threaten to bring containerised demand growth into negative territory by lowering European demand for Asian containerised imports and negatively impacting US exports due to a higher US dollar.
For UK shipping, the impact will potentially be broad but not immediate. The key issues for UK shipping are visas and work permits, fiscal arrangements including tonnage tax, and naval collaboration within Europe to counter piracy and rescue of migrants.
Any change to visa and work permit rules could undermine London's status as a maritime services centre. Shipping companies need to be able to keep open, staff, and operate representative offices in the UK without punitive or restrictive measures.
Shipping in London is principally focused around services to the industry, such as legal, insurance, brokerage and provision of such services should not be directly affected by Brexit. But should Brexit result in the departure or geographical refocusing of major international banks and financial institutions, this could impact London's stature as an international shipping centre.