The shipping industry is expecting to rebound after several years of unprofitability. Reuters reports that while overcapacity has led to a drop in freight rates that weren't enough to cover shippers' costs, but these rates are expected to go up in the next few months, leading to more revenue.
Overall, global dry bulk seaborne trade is expected to increase by 5.8 percent in 2014. Industry observers have said that some of the main reasons for the increase are the Chinese economy and urbanization, as well as falling iron ore prices. The forecasts have led to a rise in prices for new and used shipping vessels.
However, the optimism about these increases is dampened somewhat by the fact that forecasters predict many shipping carriers will continue to have trouble, and that the market is currently oversaturated. Several carriers have already filed for bankruptcy or receivership, including TMT Group and STX Pan Ocean.
It does seem as if the world economy is on the mend, even if growth is relatively tepid. The United States is seeing a slow rise in GDP, while Asian and South American countries continue to develop at a quick pace. Hopefully, these trends continue so that the shipping industry can return to profitability.
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