Drewry Finds Risk of Carrier Failure Still High
Drewryâs Z-score carrier financial stress index sunk to its lowest ever point following the first-half 2016 results. After Hanjinâs bankruptcy shippers are demanding more financial transparency from carriers. There is still much work to be done to clean up the logistical chaos created by Hanjinâs bankruptcy, but even so there are lessons from the sorry mess that need to be learned to avoid a repeat occurring. Firstly, all stakeholders must understand that no carrier is too big to fail. The hitherto expectation that some white knight would rescue an ailing carrier has been erased forever. Secondly, while Hanjinâs financial position was at the extreme edges and its demise is not expected to create a domino effectâŚ
Cautious Recovery for the Container Sector
Drewryâs latest Container Forecaster is optimistic that a marketârecovery is underway but cautions that close monitoring of key market drivers is essential as the patient is not off the at-risk list yet. The latest container trade data suggests we may have entered a real recovery phase but comparisons with the depth of the recession in 2009 must be treated with caution. With a major carrier failure thus far averted and container volumes on the upturn, many believe this year will see a return to better times and profitability. But, it is still early days; a large number of post-Panamax vessels are due for delivery this year and most of the all important transpacific rate contracts have still to be signed.
