Hanjin Shipping, the largest Steam Ship Line in Korea, filed for bankruptcy court protection after their liquidity plan submitted to Korea Development Bank was rejected on August 26th. Below is a quick recap of what happened, what will happen moving forward and what you need to know:
Hanjin announced earlier this year that they were filing for receivership which meant that banks in Korea were going to take over moving forward to avoid going bankrupt. After Hanjin presented their most recent liquidity plan to Korea Development Bank on August 26th the bank decided they no longer wanted to be involved and pulled out and as a result without the bank’s financial support announced yesterday that it would file for bankruptcy.
Hanjin is the world’s 7th largest Steam Ship Line operating 98 vessels and shipping over 609,500 TEU per year and its bankruptcy will be the largest container collapse in history and will impact rates for importers/exporters globally even those who do not use Hanjin service currently.Hanjin has put a hold on any new container loadings on ships. Delays and issues retrieving containers that are currently in Hanjin’s possession are expected for all importers/exporter. As of yesterday at least 10 vessels have been either seized or expected to be seized soon by port authorities or creditors until there is more clarity on what will happen to Hanjin next.
As a result of the Hanjin bankruptcy announcement effective today ocean rates from base port China are expected to go above $1700/40′ container to the US West Coast Ports and above $2400/40HQ container to US East Coast Ports.
Hanjin is not the only Steam Ship Line that has been losing money over the last 4 years. Additional bankruptcies and Steam Ship Line consolidations are likely as well in the next year.
See links below for more details.