New ship orders threaten to derail recovery

[LONDON] Overcapacity threatens to derail a fragile recovery in the global shipping sector as ship owners and investors place orders for new vessels betting on better times, a survey showed yesterday.

Ship owners ordered large numbers of vessels between 2007 and 2009, just as the global economy sank into its biggest crisis since the 1930s.

In recent months, prospects have brightened as the sector absorbs the tonnage as well as more positive signs for world trade. Investors including private equity players are eyeing prospects with a wave of new ship ordering taking place.