Despite the freight rate improvements that followed the collapse of Hanjin Shipping in late August, the average operating margins of 13 main container carriers remained negative in the second half of 2016, according to Alphaliner.

Due to the tough operating environment, only three carriers recorded positive operating results for the full year 2016, while the remaining ten carriers ended the year in the red.

After slumping to -9.2%, the average carrier operating margin of CMA CGM, China Shipping Container Lines, EMC, Hanjin, Hapag-Lloyd, Hyundai Merchant Marine (HMM), K Line, Denmark-based Maersk, Japan’s Mitsui O.S.K. Lines (MOL), NYK Line, Wan Hai Lines, Yang Ming Marine Transport, and Israel’s Zim Integrated Shipping Services (ZIM) stood at -1.2% in the fourth quarter of 2016.

South Korean carrier HMM recorded the worst operating results among the main carriers in 2016, as its container shipping business chalking up operating losses of KRW692bn(US$595m) for a full year operating margin of -18.5%.

HMM was therefore forced to undergo a financial restructuring exercise involving a debt-equity swap of KRW1.1tln, extension of the bond maturities of KRW0.8tln and charter rate adjustments of KRW0.43tln, as well as the disposal of various assets, Alphaliner informed.

The company will continue to rely on state support, including a government program to acquire and charter back HMM's ships with the loss from the sale to be recovered by HMM through capital injections by the Korean government.

Another container carrier, the Taiwan-based Yang Ming, also had to rely on state support after posting operating losses of TWD15.16bn (US$470m) for a negative margin of -13.1% in 2016.

The Taiwan government's National Development Fund (NDF) took a 6.4% stake in Yang Ming under a recapitalisation program in February 2017 that raised TWD1.69bn (US$54m) from six investors headed by the NDF. Alphaliner said that the NDF is expected to continue to support Yang Ming's subsequent capital raising programs.