MOODY's has upgraded its outlook for the global shipping industry to stable from negative, for the first time since June 2011.

"The revision reflects our expectation that the global industry's aggregate EBITDA will rise by mid-single digits in percentage terms year over year in 2014, in line with our minus five to 10 per cent growth range for a stable outlook," said assistant vice president Mariko Semetko.

"And while overcapacity remains a concern, we believe industry conditions are at a trough and that the supply-demand gap will not worsen materially.

"In this environment, we expect the supply of vessels will exceed demand by no more than two per cent, or that demand will exceed supply by up to two per cent."

Moody's latest report on the shipping sector further notes that cost reductions, including the effects of lower bunker prices, the application of slower steaming speeds and efficiency savings, have driven the growth in profit.

At the same time, market conditions remain tepid, but are not deteriorating, with freight rates for the dry-bulk segment showing some improvement but those for the container segment remaining under pressure.

The sector is also saving on costs through postponing and cancelling deliveries of new vessels, scrapping the oldest and most inefficient vessels, and idling vessels.