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Only Hong Kong's OOCL and Maersk Line escape Drewry's 'distress' zone
ONLY Hong Kong's Orient Overseas International Ltd (OOIL) and Denmark's AP Moller Maersk scored high enough to make it into what Drewry Maritime Research calls the "cautionary grey zone" as opposed to the "distress zone".
The Hanjin bankruptcy shows the perils faced by container shipping companies, at their highest risk levels since 2008, according to Drewry's z-score rating, reports the UK's Seatrade Maritime News.
Using Drewry's z-score rating for financial distress the average for 14 major container lines that publicly publish financial results is at its lowest level since the index started in 2008.
Any score below 1.8 represents a higher risk of bankruptcy and collectively the 14 container lines rated managed an average score of less than 1.0 in the second quarter of this year.
Three lines, including the bankrupt Hanjin had scores in negative territory; Drewry did not name the other two in that category.
"The decline in the z-score index has coincided with the heavy reduction in container freight rates that dropped to historical lows in the second-quarter," Drewry said.
"As freight rates staged a recovery in third-quarter we expect to see some uptick to the z-score when the third-quarter 2016 results are published, while the removal of Hanjin from the sample will also benefit the average score."
With the Hanjin bankruptcy Drewry says shippers seek financial transparency especially from lines that do not publish financial information.
"Privately-owned carriers will risk losing shippers' trust if they do not provide any data on their level of indebtedness and balance sheet strength," it said.
The Hanjin bankruptcy shows the perils faced by container shipping companies, at their highest risk levels since 2008, according to Drewry's z-score rating, reports the UK's Seatrade Maritime News.
Using Drewry's z-score rating for financial distress the average for 14 major container lines that publicly publish financial results is at its lowest level since the index started in 2008.
Any score below 1.8 represents a higher risk of bankruptcy and collectively the 14 container lines rated managed an average score of less than 1.0 in the second quarter of this year.
Three lines, including the bankrupt Hanjin had scores in negative territory; Drewry did not name the other two in that category.
"The decline in the z-score index has coincided with the heavy reduction in container freight rates that dropped to historical lows in the second-quarter," Drewry said.
"As freight rates staged a recovery in third-quarter we expect to see some uptick to the z-score when the third-quarter 2016 results are published, while the removal of Hanjin from the sample will also benefit the average score."
With the Hanjin bankruptcy Drewry says shippers seek financial transparency especially from lines that do not publish financial information.
"Privately-owned carriers will risk losing shippers' trust if they do not provide any data on their level of indebtedness and balance sheet strength," it said.
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