In International Shipping News 16/09/2016
The failure of Hanjin, the South Korean shipping company and seventh largest container line in the world, is an indication of how the drop in cargo rates as a result of over-capacity is affecting the shipping branch world-wide, a shipowner said.
Eugen Adami (2)“The Hanjin collapse may only be the tip of the iceberg while other lines try to survive now with merging and consolidation,” Eugen Adami, owner of the Limassol-based Mastermind Group, said in an interview.
The Baltic Dry Index, which measures international cargo rates, fell 5 per cent on Thursday, to 756, in after rising 58 per cent since January 1. Currently, cargo rates are roughly one fourth of what they were at the end of 2013.
Hanjin filed for court receivership in late August and dozens of its vessels with their cargo remained at ports around the world and have run or are running out of supplies. The Cyprus Shipping Council declined to comment while the Limassol harbourmaster was not immediately available.
Revenue from ship management makes out roughly 5 per cent of Cyprus’s economy. The Cyprus Business Mail understands that Hanjin has no operations in Cyprus.
“The costs to move a container from Hamburg to Bremen by truck are higher than to sea-freight the same container all the way from Korea to Germany,” said Adami who served as chairman of the Cyprus Shipping Council until 2015.
Freight forwarders, on which container shipping companies depend, “make good use of the over-capacity, existing in all container line,s and succeed to negotiate the seafreight down to ridiculous and unsustainable low levels”.
Cargo on board of Hanjin cargo ship ordered by merchants in Cyprus, Adami continued, is likely to arrive “with a certain delay”.
“For containers, which are still at terminals and not on board vessels the situation is different, and the terminals worldwide may take a different approach to the further transportation of the containers,” he said.
Source: Cyprus Business Mail
