Ocean Carriers Top 30: Tough year on the high seas

Ocean Carriers Top 30: Tough year on the high seas

The poor handling of Hanjin Shipping’s collapse has done irreparable damage to the Korean carrier’s reputation, and it’s improbable that the carrier can be revived, say industry analysts.

According to the Paris-based consultancy Alphaliner, even the Seoul district court’s approval for rehabilitation granted last month will not be enough to rescue Hanjin. Furthermore, 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. “It’s clear that the rapid disintegration of the company sent shock waves across the liner market,” says Alphaliner analyst Ashe Marson.

In the wake of the news, carriers and shippers are scrambling to take contingency measures to fill the void left by Hanjin Shipping, which held a global market share of just under 3%.

According to Alphaliner, the carrier’s departure is expected to be felt the most on the trans-Pacific and Asia-Europe routes, where the shipping line had capacity shares of 6.7% and 4.9%, respectively.

“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,” adds Marson.


Read the rest of this Special Report at Logistics Management