One could say that the complete meltdown, and ultimate collapse, of Danish OW Bunker in many ways was an event that wound up reflecting and encapsulating the developments in 2014 as a whole in shipping as well as in offshore. The crash of the illustrious bunker company capped off a year that began with an optimistic belief in growth and progress, but where the actual developments, as months went by, took most of the players in the industry by surprise.
At the threshold of the new year, the shipping and offshore industries find themselves in a completely different situation compared to one year ago. The diving oil price has pulled the rug out from under many of the energy projects that looked highly promising, the ones where investors had to fight hard to secure stakes. Companies such as Statoil and Maersk Oil were forced to face this fact. The companies have stepped hard on the brakes and projects have been put on hold, and the large subcontractor industry - which has made a good living on the virtually inexhaustible budgets of the energy companies - can no longer automatically trust in new orders going forward. And if the orders do come, the price will be lower than in the past.
Those benefiting from the low oil price include the tanker carriers, as they are now busy serving customers who are looking to stockpile cheap oil. Loser could include equipment manufacturers producing systems to help carriers reduce their bunker consumption, just as there are rumors that slow steaming could be sacrificed to please customers, though no one is willing to confirm plans to speed up the ships. In any case, the major benefit of reducing bunker consumption has disappeared.
Norden's financial downturn and investors' stated distrust in Scorpio Bulkers represent just two other events in 2014 illustrating how numerous other developments caught carriers, management teams and investors off guard in a turbulent year. And that still leaves topics such as the overcapacity in many other shipping segments and the disappointing growth rate in China unmentioned.
As such, the starting point of 2015 is completely than a year ago. The coming year will bring more and bigger challenges to many players than they are otherwise used to, and companies will have to focus on securing the necessary financial padding as well as being able to navigate in treacherous waters.
ShippingWatch will boost its editorial team next year in order to deliver an even better product with stronger and sharper stories to keep our readers up to date on possibilities and risks. We look forward to starting up again in the new year and wish all our readers an exciting and positive 2015.