According to the fourth Norton Rose "The Way
Ahead" Transport survey - Where are you now?
A global survey of 1,000 plus respondents across shipping,
aviation and rail
Asia Pacific ranks equal to Europe as the market of greatest
importance to the global shipping sector.
London leads as the financial centre considered best able to
meet the sector's financing needs (40%), followed by New York
(15%) and Singapore (13%).
Increased financial constraint is highlighted as the most
significant change to respondents' businesses between 2010 and
Shipping suffered more than aviation or rail between 2010 and
2012 - 34% of shipping respondents report a reduction in turnover
against 22% of aviation respondents and 16% of rail
Fuel cost remains a key concern - 69% regard more efficient
fuel consumption as the most important development focus for the
The perceived lack of debt financing has led to an increase in
interest in other forms of finance, in particular structured
finance, private equity and export credit.
58% have sought to change their market position or geographical
focus since 2010.
Asia Pacific has been ranked the geographical market of greatest
importance to the global shipping market alongside Europe, each
being selected by 39 per cent of global shipping respondents,
according to international legal practice Norton Rose's
"The Way Ahead" Transport survey - Where are you now?
However, London leads as the financial centre considered best
able to provide for the shipping sector's financing needs, as
ranked by 40 per cent of shipping respondents, followed by New York
(15 per cent) and Singapore (13 per cent). Singapore is almost
twice as popular with respondents from the shipping sector compared
to aviation (8 per cent) and three times as popular than with rail
(4 per cent).
The survey also indicates that shipping is the transport sector
to have suffered the most in the wake of the global financial
crisis. Over two-fifths (42 per cent) highlight increased financial
constraint as the most significant change to their business between
2010 and 2012 and 34 per cent report a reduction in turnover during
this period, compared to 22 per cent of respondents from the
aviation sector and 16 per cent from the rail sector.
The shipping sector has also seen costs rise more than aviation
or rail. Almost half (48 per cent) report that fixed costs
increased between 2010 and 2012, compared to 43 per cent of rail
sector respondents and 42 per cent of aviation sector
As a result, shipping is looking at a far wider range of funding
options than the aviation and rail sectors. Over a quarter (26 per
cent) of respondents are using or considering using structured
finance for the first time and 23 per cent are using or considering
using private equity for the first time. Indeed, 26 per cent of
respondents from the shipping sector anticipate that private equity
will be their primary source of funding over the next two
The survey also suggests that the cost of fuel is of greatest
concern to the shipping sector. Over two-thirds (69 per cent)
regard more efficient fuel consumption as the most important
development focus for the shipping sector, compared to 64 per cent
of respondents from the aviation sector and just 36 per cent of
respondents from the rail sector.
Harry Theochari, Global Head of Transport, Norton Rose,
"While shipping has suffered a torrid few years in the wake
of the global financial crisis, facing immense pressure in terms of
price, costs and funding there are now signs of renewed optimism
emerging across the sector. That said, it is clear to us that
shipping remains in a fragile condition."
Simon Hartley, Co-Head of Shipping, Norton Rose, says:
"Shipping appears to be in the greatest turmoil but
positive strategies are being pursued in the face of very tough
trading conditions, including the entry into new market segments
and new geographical regions. Shipping is also, by dint of
necessity, looking at alternative ways of funding itself, with the
much talked about private equity continuing to be an option used
and explored by a number of shipping companies."
Philip Roche, Co-Head of Shipping, Norton Rose, says:
"In line with the development of China and India as
economic powers, Asia has been the most buoyant shipping market for
a number of years. While London and to some extent New York remain
key financial and legal service centres for the shipping industry,
Singapore has successfully positioned itself as an increasingly
important legal and financial centre for shipping and this trend
will doubtless continue."
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