Coronavirus is taking a serious blow to container shipping, which could lose up to $ 23 billion this year. This is the estimate of the analysis company Sea-Intelligence Consulting, which has drawn up two scenarios.
In the best one, the shipping companies could suffer a traffic reduction of at least 10% compared to last year, with a loss of profits equal to six billion dollars.
In the worst case scenario, traffic could collapse to 2009 levels, with losses that could reach 23 billion, also due to the sharp reduction in freight rates.
The resumption of Chinese production in March increased the number of container ships underway, but global companies still maintained the reduction of some services on all routes.
Between April and May, the hold reduction will be between 29% and 34% compared to the same period of 2019, also to try to increase freight rates by reducing the offer. This situation leads another analysis company, Alphaliner, to detect a high probability of insolvency for seven of the eleven major global companies.
This estimate stems from the Altman-Z calculation procedure, developed in the 1960s by Robert Altman and which calculates a company’s chances of going bankrupt within two years. For these companies, the index is 1.3, equal to a “very high” probability.
The cause is the stoppage of portacontainer, valued in three million teu (equal to 13% of the total hold), which is reducing the cash flow of the companies. The six companies that show negative working capital are Cma Cgm, Hapag-Lloyd, Hmm, Pil, Yang Ming and Zim.