Hanjin bankruptcy sparks global shipping crisis

But the failure of the firm, which ranks as the world’s seventh-largest shipper of containers, is unlikely to have a significant impact on operations at the Port of Felxistowe, with none of Hanjin’s own ships now operating on routes calling at the port. She added that it also represents “an enormous challenge to US shippers” and “could have a substantial impact on consumers and the economy at large”.

These include instances where lashing firms have refused service, or where port authorities have blocked entry.

One ship had been seized, in Singapore.

“Retailers’ main concern is that there is millions of dollars worth of merchandise that needs to be on store shelves that could be impacted by this”, NRF Vice President for Supply Chain and Customs Policy Jonathan Gold said in a statement Thursday.

Cargo destined for the United States has been delayed at their respective point of origin while already delivered cargo is sitting unhanded in USA ports. “It is understandable that port terminal operators, railroads, trucking companies and others don’t want to do work for Hanjin if they are concerned they won’t get paid”.

“In reference to media reports stating a potential bankruptcy of Hanjin Shipping, we are closely monitoring the situation to ensure your cargo is protected”, a customer advisory released late Wednesday by Hanjin competitor Cosco Container Lines read.

The younger Cho took over management of Hanjin Shipping from Choi Eun Young, the wife of his younger brother, who ran the shipping firm until his death in 2006. Hanjin has secured an injunction protecting its ships against seizure by creditors in Korea and is seeking a similar injunction for protection in ports overseas.

Hanjin has been losing money for years. Since many vessels already are operating at high capacity, shippers may wind up paying a premium to squeeze their containers on board, said Jock O’Connell, global trade adviser to Los Angeles-based Beacon Economics. Brokers said freight rates likely would continue to rise in coming days as cargo owners are trying to get their goods from stranded ships and are willing to pay a premium. Shipping rates have soared as a result, increasing to $2,300 per container by Thursday, up from $1,700 four days earlier.

And an employee at the Hanjin office in Felixstowe said that nobody within the United Kingdom operation was authorised to talk about the situation facing the company.

Shipping companies globally have been affected by a downturn in rates, with a slowdown in many major economies around the world having combined with the introduction of larger vessels to create over-capacity in the industry.

But weaker trade and overcapacity have sent ocean shipping rates plunging in recent years. A few months ago, Poskus said, prices hit historic lows globally – down to as much as $600 per container from Shanghai to Los Angeles.

That wouldn’t even cover fuel costs for the huge ships, he said.

Also late Thursday, Business Korea reported that a deal had been tentatively reached for Hanjin competitor Hyundai Merchant Marine to absorb Hanjin’s core assets, with the aim of merging the two companies. With about 5 percent of ships in the global trading fleet sitting idle, he believes there is room to take over Hanjin’s capacity and carriers already are discussing the possibility of adding ships.

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