Patience and perseverance – characteristics shipping needs in the Year of the Rooster

Patience and perseverance – characteristics shipping needs in the Year of the Rooster

Farewell to the Chinese Year of Monkey, a suitably cheeky period for shipping. Will the incoming Fire Rooster have anything for owners to crow about? Chief correspondent Jason Jiang consults the stars.

In Chinese astrology, the rooster is said to have many good characteristics such as being trustworthy, competitive, a wise decision-maker, conservative and patient.

Fire is a traditional Chinese element, which offers initiative, prosperity and enthusiasm. In the case of the fooster, fire is particularly helpful as it broadens the obsessive focus of the rooster and brings about greater energy.

“As the rooster crows each morning signaling that the darkness of the night has ended and the light of the day has come, many Feng Shui experts believe that this year will be the turning point for the world economy towards lighter and better times,” Lion Shipbrokers wrote in its most recent weekly report. Others suggest that “with too many roosters crowing, the sun never comes up”. Many have also warned that since roosters – especially fire roosters – dislike water, water-related industries such as shipping might struggle this year.

The Year of the Rooster year should be good for shipbrokers however, Lion said, as they both share similar personality characteristics: they are both loud, talkative, amusing, charming, enjoying being the center of attention in parties and social gatherings, usually bragging about themselves and their accomplishments and always try to appear attractive and confident.

In terms of the markets, dry bulk looks set to be the most activity this year as owners wheel and deal before prices are expected to tick up too much. Containers and tankers will remain challenging with no sign of bottoming out and offshore in the Year of the Rooster is unlikely to show any dawn of an upturn either.

For those in the challenging markets, patience and perseverance are very much needed to keep the business sustainable and waiting for opportunities to rebound.

For the Year of Fire Rooster in general, BIMCO believes the world is unlikely to grow its GDP in a way that will benefit the shipping industry, noting global GDP growth is driven by service sectors and developing and emerging economies, resulting in a lower GDP-to-trade multiplier, and therefore generating a lower level of shipping demand.

“For 2017, it is vitally important that bulk shipowners handle the supply side of the market with great care. A continuance of the alarmingly low level of demolition activity in the second half of 2016 simply will not deliver the needed zero fleet growth,” Peter Sand, chief shipping analyst of BIMCO, warns.

Christian Waldegrave, head of research at Teekay Corporation, suggests tanker owners will not be cock-a-hoop at the prospects for the coming 12 months.

“In 2016, earnings across the tanker sector did average lower than 2015 – yet still met the 10 year average. 2017 is expected to continue to be a challenging year for tanker earnings but we think that the bottom might be reached in 2018. Given our outlook on supply and demand, our prospects from 2018 onwards are much brighter and we would expect a pretty strong tanker market to emerge towards the end of the decade,” he said

For the markets with recovering signs, the Year of Fire Rooster could be an important year to make wise investment decisions.

Neil Dekker, Drewry’s director of container research, believes the container shipping market will slightly improve in 2017.

“We anticipate a slightly brighter picture with global freight rates forecast to improve by about 8%,” Dekker said. “But once again, this can’t be seen as a genuine recovery since these so-called improvements must be set in context against the unnecessarily big rate declines since in both 2015 and 2016,” Dekker added.

Another shipping sector that could see a sign of recovery is multipurpose shipping.

“Slow growth in supply, alongside better growth in demand, is expected to help multipurpose charter rates in 2017 and beyond, supported by a recovery in the dry bulk market, albeit a slow one,” said Susan Oatway, lead analyst for multipurpose shipping at Drewry.

“In particular, the oversupply situation, which has dogged this sector for many years, is expected to level out in the medium term,” Oatway added.

Oatway reckons that breakbulk demand is likely to start recovering as growth picks up in developing economies in Asia and elsewhere.

Drewry’s latest Multipurpose Shipping Market Review and Forecaster report said the multipurpose shipping market will begin to see the first signs of recovery by the end of 2017, following in the steps of the dry bulk and container shipping markets.

Then there is the other elephant in the room that shipowners the world over will have to contend with – the new occupant of the White House – Donald J Trump, a Fire Dog in terms of the Chinese zodiac, and an unknown in what his tenure at 1600 Pennsylvania Avenue holds for global trade and shipping.

We wish all our readers a healthy and if at all possible prosperous year ahead.

Jason Jiang

Jason worked for a number of logistics firms following his English degree, then switched this hands-on experience to writing and has since become one the most prolific writers on the diverse China logistics industry writing for a host of titles including Supply Chain Asia, Cargo Facts and Air Cargo Week. Jason’s access to the biggest shippers with business in China has proved an invaluable source of exclusives.

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1 Comment

  1. Avatar
    Hans Morus
    January 30, 2017 at 4:57 am

    Rooster on roster, words for googwill associated. Fortune tellers to alter the fate of a deep fried miserable rooster and make it again a flying creature. That will eventually amaze ordinary people like me if not alot.
    The monkey could have climbed higher. I am afraid the rooster will crow no matter whom the crocodile is going to bite with tears next. A little prayer goes to victims lookalike for swimming a little longer in the pond of rumour for sake of whatever …