The sad but somewhat inevitable news that Hanjin Shipping have filed for bankruptcy has caused great concern in the worldwide shipping industry.
The collapse of this company, the seventh largest in terms of fleet capacity, will have an enormous knock on effect, not only for all concerned with the company, but for the container shipping industry in general.
The container shipping companies are linked to each other through various East-West alliances and other trading agreements.
Hanjin is currently a member of the CKYHE alliance alongside Cosco, K Line, Yang Ming and Evergreen. It was to have joined another partnership from next April, The Alliance, being set up by Hapag-Lloyd, NYK, MOL, K Line and Yang Ming. Evergreen and Cosco are poised to team up with CMA CGM and OOCL in the Ocean Alliance.
Customers who are shipping goods through the CKYHE Alliance will have a worrying time about whether or not their cargoes are onboard a Hanjin vessel, some of which have been refused entry into certain ports, particularly in the USA. A total of 540,000 TEU were at sea on Hanjin vessels at the time of the company’s collapse.
So what is the future for the container shipping company? Clearly there are stormy times ahead. Even the big fleets, Maersk and MSC are showing poor results in their latest accounts. They, however, are not in danger, but some smaller fleets may well be. Earler this year we saw NOL taken over by CMA CGM and I would expect to see further takeovers happen in the coming year.
In the meantime Hyundai Merchant Marine are endeavouring to help stranded Hanjin vessels and may well try to acquire the assets of the failed company. However, governments are imposing huge penalties per TEU to retrieve Hanjin cargoes.
Let’s hope an upturn in trade will happen and prevent any more of these well known shipping lines from going under.