The International Transport Forum (ITF), part of the OECD, has cautioned governments against bailouts of container shipping lines that create a “moral hazard”, externalise risks to the public and generate a “race to the bottom” on regulation, subsidies and tax exemptions.
In a new report, the organisation pointed out that container carriers are “ill-prepared” for the impending economic shock from the COVID-19 pandemic due to their high debt levels.
Cumulative debt of 14 major container carriers reached US$95bn by Q3 2019, up from US$76bn in 2010 and the ITF believes it is likely that they will seek more government aid in the coming months.
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