Paul Bernardt, Managing Director – Harmony Relocation Network
In summer 2016, out of the blue, South Korean shipping line Hanjin was unable to continue normal operations and requested deferment of payment. Hanjin was the largest South Korean container carrier, and a global top-10 player. Close to one hundred container ships (carrying a total of 540,000 containers), as well as some bulk carriers and tankers, were suddenly at risk.
The ships were everywhere: ports, coastal waters, international waters. Ships still outside the ports weren’t allowed to dock for fear of non-payment of both port and handling fees. Ships already docked were chained and confiscated for the same reason. Unloaded containers weren’t released for fear of losing them.
Maritime lawyers had a ball!
The owners of the loaded goods (the ‘shippers’) demanded release of the containers. Terminals kindly requested advance payment of handling fees, even when shippers had pre-paid. Hanjin bank accounts were frozen globally. Charter owners demanded their ships back. Around the world, claims were filed in courts for loss or delay of cargoes that were time-sensitive or spoilable, and for breach of contract in failing to deliver cargoes.
The Bayonne Bridge – a Modern Day Hotel California
Meanwhile, the New Jersey infrastructure had an additional challenge. Off the coast of New York, the Hanjin Miami was anchored, scheduled to be offloaded. However, once empty, the ships’ height would increase preventing it from sailing out, as it would be unable to pass underneath the Bayonne Bridge. Bugger! The New Jersey terminal could not keep the ship docked as it would cost too much money to occupy port capacity. The terminal was also unwilling to load it with empty containers – who was going to pay?
A New Suez Crisis
Fast forward to 23rd March 2021. Ocean freight rates had skyrocketed in recent months. There was a strong wind in the Suez Canal, the sun had just risen. The captain of the ‘Ever Given’ containership parked his vessel in the mud, on both sides of the Canal. One ship blocking 15% of global trade for an entire week. A long, long week. Only now people start to wonder who carries the risk. After all, what are the odds?
The Risk is Real
There are risks involved with international relocations, well beyond those listed in this paper. Risks further downstream, with every supplier supporting global mobility departments. Health & Safety (and not just related to COVID-19). Environmental. Bankruptcy. Currency, subcontractors, bribery & corruption, GDPR, cyber-attacks. And probably a few more.
“Ask your (prospect) vendors how they deal with global mobility risk. Think about the potential consequences and the costs thereof. And, only then, look at the direct cost.”
This piece was written as the foreword to our research paper Managing Risk in the New Normal. We’re exploring global mobility risk in more detail at RES Live! 24th June 2021. Registration is now open, so get your name on the guest list.
Harmony Relocation Network
Harmony is a global cooperative network of moving companies and destination services providers, upholding strong family values through generations of heritage, brought together in one truly global and solid infrastructure, providing the same level of high-quality services, local expertise and personal commitment, the world over.
Paul is the archetypical Dutchman. Tall, and speaks his mind in clear terms. Never rude though. He’s been with Harmony Relocation since the start of his career, after studying Business Economy at the Free University in Amsterdam. His work has always been on the ‘outside’ of the company. Management and expansion of the global cooperative network, and with large global clients and prospects. He is supported by an excellent team of specialists.
He thought he loved travelling, until the pandemic stopped that alleged hobby. Turned out that being at home and spending time with the family was a million times more valuable. A lot of knowledge built up over the years, about many things relocation related, so happy to help any RES Forum member with questions or support.