Annyeong Hanjin! South Korean Shipping Giant Enters Receivership

After a tumultuous period of missed merger opportunities and unsuccessful attempts to remain solvent through massive bank loans, Hanjin Shipping will enter into receivership. It is likely under court receivership that Hanjin will liquidate.  The impact of this loss will affect not only the CKYHE Alliance partners but also the entire industry.  One of the most significant outcomes will be an immediate adjustment in US import rates for both Air and Ocean. Capacity will become tighter, and will indirectly affect air freight because of the lack available space. With the disappearance of the 9th largest shipping line in the world, shippers should expect to see a new GRI soon. They should also plan for this new GRI to extend into October.

Additionally, there is also a chance of a significant logistical disturbance because more than a million containers are moving along global shipping lanes which could be paralyzed. OCEANAIR is already receiving reports the aftermath is going to put more pressure on other shippers to meet some of this demand. Two weeks ago, COSCO announced extra loads for mid-September to clear Walmart’s cargo. Hong Kong International Terminal (HIT) stopped the release of any Hanjin container, and Hanjin Hong Kong stopped accepting any new bookings. Unconfirmed reports from China are also speculating more signs of the quick fallout. Supposedly, Yang Shan Port held all Hanjin imported containers. Hanjin’s vessels Sooho in Yang Shan Port and Roma in Singapore have been arrested. Numerous seaports are refusing Hanjin ships to enter harbors unless those vessels pay fees upfront for cargo operations. As a member of the CKYHE vessel-sharing alliance with COSCO, K-Line, Evergreen and Yang Ming, containers booked through these carriers may also be moving on a Hanjin ship, so there could some other issues arising from this as well.

However, the most detrimental effects will be on the Korean economy, which expects to lose $17 trillion from revenue of sales, shipping fares, and the decline in transit shipments. With 98 container ships, Hanjin Shipping delivered container shipping services to more than 400 annual visits via 74 routes and connected 90 ports around the world. Last July, Hanjin ranked fifth regarding the market share of waterways in Americas with 7.4% and a global share of  2.95% of container vessels.

For questions or concerns regarding this change to the global shipping industry, please contact your OCEANAIR representative.