It explained that the unprecedented amount of capacity withdrawn in April and May, a result of a collapse in demand, "will hurt carriers' operating cash flows and further weaken their fragile balance sheets".

Picking up on the ocean liner Altman Z-scores, as at the end of December last year, for the 11 largest carriers that publish results ?excluding Japanese merged carrier ONE ?the consultant painted a gloomy picture of the financial health of the liner industry.

Altman Z-scores are a measure of the likelihood of insolvency for a container shipping line, and range from lower than 1.8 as "very high", to 3.0 or higher as "unlikely".

Four carriers ?Hapag-Lloyd, Maersk Line, OOCL and Wan Hai Lines ?had Z-scores of 1.72 to 1.92 points, with a score of 1.8 to 2.7 regarded as a "high risk", according to the index. And, worryingly, the other seven carriers had scores of less than 1.3.

"Carriers with track records of negative earnings are also particularly at risk, with three carriers' Z-scores ?HMM, Yang Ming and Zim ?lowered due to their negative retained earnings," said Alphaliner.

Since the end of March, credit rating agency Moody's has changed the credit outlook for Hapag-Lloyd, Maersk, MOL and NYK from 'stable to "negative" and placed CMA CGM's credit rating "under review" for potential downgrades.

It said Moody's had highlighted the high dependency of carriers on world trade and industrial and consumer demand, which would all be negatively impacted by covid-19 restrictions.

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