Government subsidies to ocean carriers will only delay overall restructuring

Market analyst Alphaliner says increased government intervention to provide financial support to struggling carriers could ultimately delay a much-needed restructuring of the container shipping sector. Alphaliner says state aid might well prolong the industry’s recovery process, as shipping continues to grapple with the problem of vessel overcapacity.

Alphaliner cites the Taiwanese and South Korean governments as the most recent to announce plans to support domestic firms. Several European and Middle Eastern countries have also been providing financial aid to their shipping firms.

These protectionist moves, ostensibly aimed at protecting domestic exporters and manufacturers, as well as domestic shipbuilders, are driven by the long held belief that shipping is important to the country’s economic and strategic interests. The negative side effect is that the weakest container lines could remain afloat, delaying industry restructuring.

Source: Alphaliner

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