In International Shipping News 07/09/2016
Shippers, partner carriers, vessel owners, vendors and staff were all left in the lurch in the aftermath of Hanjin Shipping’s dramatic collapse. The Korean carrier filed for receivership on 31 August, leaving a trail of stranded cargo, detained ships, unpaid bills and lawsuits that could take several months to clear up. The poor handling of the crisis has done irreparable damage to the Korean carrier’s reputation, and it is improbable that Hanjin Shipping can be revived as it was – despite the Seoul district court’s approval for rehabilitation granted on 1 September.
A merger with Hyundai Merchant Marine (HMM), or any potential ‘white knight’, can also be ruled out, given its financially encumbered status. With HMM, backed by the Korean Development Bank (KDB), now looking at the acquisition of Hanjin’s ‘profitable’ assets, a liquidation of Hanjin Shipping appears to be the most likely outcome. The rapid disintegration of the company sent shock waves across the liner market. Carriers and shippers scrambled to take contingency measures to fill the void left by Hanjin Shipping, which held a global market share of just under 3.0%.
The carrier’s departure will be most keenly felt on the Transpacific and Asia – Europe routes, where the shipping line had respective capacity shares of 6.7% and 4.9%. Responsibility for the fallout must be jointly borne by Hanjin Shipping’s creditors and by the Hanjin Group, who continued to wrangle over sharing the cost of a financial restructuring until the very last minute, and who were unprepared to deal with the consequences of the insolvency proceedings.
