The Hanjin Shipping drama is playing-out as expected. Rows between shippers, asset owners, service providers and the different forms of creditors have, quite predictably, erupted over the carcass of the business.
A good example was the court case brought by a group of freight forwarders in the US last week, who complained that they were over-charged by truck and rail companies when they tried to recover their containers from the port terminal, a situation made worse by the refusal of terminal companies to release containers and chassis from the port. The court ruled that the transport companies had to publish the rates agreed previously with Hanjin and allow the forwarders access to their cargo.
Such operational problems have been eased somewhat by the injection of funds by Hanjin Shipping’s equity holders, with the Chairman of the group that owns Hanjin Shipping making US$36m available. Whilst this has facilitated the unwinding of the affairs of the line, it will not resolve the long-term fate of the company.
In the meantime, a court in South Korea ruled (September 19, 2016) that all of Hanjin Shipping’s vessels must be returned to their owners once their cargoes have been discharged. Around a third of the fleet is owned by Hanjin itself. These are generally smaller Panamax vessels whose value is questionable. A story in the Wall Street Journal suggested that the company was trying to restructure around a fleet of just 15 ships creating a feeder line in north Asia, but the feeling in the industry is that this might be difficult and that liquidation is more likely.
Of course the beneficiaries of the collapse of Hanjin Shipping have been its competitors. Speaking to Reuters on Tuesday, the Executive Vice-President of COSCO, Sun Jiakang, observed that his line had already experienced better margins, whilst “shippers are now more keen to choose shipping companies with good credit that can provide stable services, and they may shun companies with poor credit”.
Source: Transport Intelligence, September 20, 2016
Author: Thomas Cullen
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