Hanjin Shipping

Hanjin Shipping Co. Ltd
Hanjin Shipping
Native name
 한진해운
Shipping
Founded 1977
Headquarters South Korea
Key people
 Cho Yang Ho (Chairman & Co-Chief Executive Officer), Suk Tai Soo (Co-Chief Executive Officer, Director)
Products Shipping, Ocean Freight,
Website hanjin.com

Hanjin Shipping Co. Ltd is a South Korean integrated logistics and container transport company. Prior to its financial demise, Hanjin Shipping was South Korea's largest container line and one of the world's top ten container carriers in terms of capacity. In August 2016, the company applied for receivership.

Hanjin shipping operates some 60 liner and tramper services around the globe transporting over 100 million tons of cargo annually. Its fleet consists of many container ships, bulk and LNG carriers. Hanjin Shipping has its own subsidiaries dedicated to ocean transportation and terminal operation and it has several branch offices in various countries. Due to its financial collapse, Hanjin has lost control and ownership over large portions of its fleet and the majority of its chartered assets have been confiscated by creditors.

2016 financial collapse

In April 2016, Hanjin applied to its creditors for debt restructuring, in order to avoid formal insolvency proceedings.[1] On August 31, 2016, Hanjin filed for bankruptcy protection at the Seoul Central District Court and requested the court to freeze its assets, after losing support from its banks the previous day.[2] Hanjin vessels are experiencing access issues to ports globally.[3] Ports and other firms are demanding arrears and prepayments before providing services to Hanjin vessels.[3]

On September 2 Hanjin Shipping Co. filed papers in U.S. Bankruptcy court in Newark, New Jersey that would allow its vessels to dock without its ships, cargo or equipment being confiscated by creditors. As of September 9 the Hanjin Greece will be allowed to dock, discharge and load containers at the Port of Long Beach. Hanjin Montevideo and Hanjin Boston are expected to dock next.

The financial struggles of Hanjin Shipping are attributable to an ongoing downturn in the container shipping industry that is the result of numerous interrelated factors such as weak global GDP, overcapacity on container vessels, "bloated" US retail inventories, changing consumer spending patterns, Chinese economic slowdown, and muted demand for container shipping. The downturn has dented profits and crippled the financial health for the majority of the top twenty ocean carriers.[4]

Hanjin Shipping's imminent dissolution would be the largest and most significant bankruptcy in the container transport industry[5] and is causing worldwide disruption in shipping as cargo ships get stuck at ports and canals waiting for cash payments.[2] Hanjin's bankruptcy has created a massive ripple effect. Other business that rely on physical products have found themselves without the expected revenue from inventory that became stuck at sea. Though large companies such as Nike have been affected the effects are more prominent on smaller companies. 80 of Hanjin's chartered ships have either been returned to their owners or ordered to be returned to their owners.[6]

Bogged down with tremendous debt, trapped in a struggling industry unlikely to improve in the near future, and with assets confiscated by creditors or abandoned by the company, signs have begun to appear that Hanjin will likely be dissolved by the South Korean government and stakeholders.[7] In a matter of weeks after its receivership Hanjin's global presence and dominance in its industry withered away. The company has announced plans to shut down offices around the world,[8] lay-off workers,[9][10] sell remaining assets,[11] and dismantle its service network. Other container lines have distanced themselves from Hanjin and joint operations with the company have been terminated. As Hanjin has relinquished control of its assets, its reputation as a reliable container line has faded among shippers and the company has fallen from its rank as the world's seventh-largest container line to the twenty-fourth largest.[12]

Services

Hanjin 20 foot containers

See also

References

  1. ↑ Nam, In-soo. "Hanjin Shipping Asks Creditor to Restructure Debt". wsj.com. Wall Street Journal. Retrieved 26 April 2016.
  2. 1 2 "Hanjin Shipping files for receivership, as ports turn away its vessels". Reuters. Retrieved 31 August 2016.
  3. 1 2 "Shipping collapse leaves freight stranded, portends weak economy". 2016-09-05. Retrieved 2016-09-05.
  4. ↑ http://www.npr.org/sections/parallels/2016/08/20/490621376/amid-industry-downturn-global-shipping-sees-record-low-growth
  5. ↑ http://www.wsj.com/articles/troubled-hanjin-shipping-to-sell-healthy-assets-to-rival-1472611190
  6. 1 2 "HANJIN SHIPPING : Customer Advisory View". www.hanjin.com. Retrieved 2016-10-20.
  7. ↑ http://www.joc.com/maritime-news/container-lines/hanjin-shipping/hanjin-shipping-liquidation-likely_20160914.html
  8. ↑ http://www.wsj.com/articles/hanjin-shipping-to-close-european-operations-1477275619
  9. ↑ http://www.maritimeherald.com/2016/hanjin-shipping-layoff-2500-shipping-crew-until-end-of-january/
  10. ↑ http://www.maritime-executive.com/article/hanjin-group-lays-off-over-500-mariners
  11. ↑ http://fortune.com/2016/10/17/hanjin-shipping-asset-sale-hyundai/
  12. ↑ http://www.alphaliner.com/top100/
  13. ↑ "Alphaliner - TOP 100 - Existing fleet on October 2016". www.alphaliner.com. Retrieved 2016-11-30.
  14. 1 2 3 "Overview". Service. Hanjin Shipping. Retrieved 14 August 2013.
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