OECD warns against shipping industry bailouts that offload risk to public

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.