The freezing of the Korean liner’s assets has turned it into a ‘public enemy’ for the international maritime transport industry. The effects of Hanjin Shipping’s bankruptcy and court receivership filing have rippled through the industry thanks to the carrier’s lack of funds to pay for port fees and the need to divert cargo to other carriers.
The main effect Hanjin’s exit has had on the rest of the busines is the withdrawal of the nearly 620 thousand TEUs of capacity. Now those over 600,000 TEUs must be redistributed among other carriers that had already assigned their spaces. Experts predicted that the immediate effect would fall on freight rates, but container spot rates have also felt the sudden whiplash of Hanjin’s exit with unexpected rises, especially in the Asia-North Europe and Transpacific trade routes.
With the urgent need to load cargo at any price, container spot rates had an average increase of 40% from Asia-US and Asia-Europe, balancing between US$1700 and US$2400/FEU, and rates are expected to grow by US$500 more by end-September. Meanwhile, spot rates Asia-North Europe are still below US$1000, but inceases are also expected in the short term.
Over 50% of Hanjin’s fleet, made up mostly by containerships, remains adrift in international waters with all kinds of cargo on board, waiting for Hanjin’s creditors or partners find a solution to pay for port fees so they can dock and unload.
Along with the late vessel arrival departures are also being postponed, because most ports would likely block access to their facilties and, in the case they did let them dock on their premises, Hanjin’s ships would most probably be seized by creditors. The Korean shipping liner took preemptive measures and suspended all departures to foreign ports.
The problem affects mostly Hanjin’s own vessels and those chartered by the carrier, the liner’s own containers and external ones and on-board cargo from Hanjin’s customers and forwarder-chartered spaces.
Only three months from the holiday season, September marks the beginning of peak-season for maritime transport, so the 500,000 TEUs’ stand-by situation is complex for the carrier and cargo owners alike.
According to the Korean International Trade Association (KITA), large international brands such as Samsung, LG Electronics and Nexan Tire Corp transport considerable volumes of cargo in the Transpacific trade route. Press reports say that some shippers are even looking into air freight so that their cargo arrives on time to customers.
Others affected by Hanjin’s exit are the former partners of the CKYHE alliance. Many shippers are now preferring to cut-off all ties to Hanjin in case of any additional repercussions. The problem lies in the lack of available space and the impending need to deliver on time.
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