Mon, Sep 05, 2016 - Page 14 News List

Overcapacity drowning shipping: analysts

AFP, SINGAPORE

Recent moves include CMA CGM’s purchase of Singapore’s Neptune Orient Lines and a June tie-up between Hapag-Lloyd and United Arab Shipping Co.

“I think [Hanjin] expanded after the global financial crisis, expecting the market to recover and the cash flows to come,” he said. “The problem was the market just did not come back. They were waiting for the market recovery so that they could retire their short-term debt, long-term debt. That was their major undoing.”

For Kapoor, Hanjin is the exception in the industry, not the rule.

“They are all vulnerable to the underlying markets which remain weak, but there is no further bankruptcy that is threatening any other company in the market,” he said.

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