HANJIN shipping line, ranked 7th in the world and 1st in Korea with a 98 container ship fleet, filed for bankruptcy last week. The bankruptcy followed on years of losses.

This means that new cargo is no longer being accepted, assets are frozen, the ships are being refused entry to ports/terminals and are being denied permission to offload containers. HANJIN Ships are waiting offshore until there is more clarity on how to proceed.

It can be expected that this bankruptcy will have a domino effect on the global supply chain. This comes at a time that vessels are already running at high capacity, so prices may soar. This in contrast to the past years of economic recession, where prices actually hit historical lows. Some industry experts believe that the current rate increases will only last for a month, but with prices needing to rise somewhat anyway in order to be sustainable. There should be room to create the additional capacity in the global trading fleet with carriers adding existing ships.

European shippers and freight forwarders have joined efforts to push back on the excessive fees that are currently being demanded for handling. The European Shippers’ Council in Brussels has called for terminals that are holding HANJIN containers to release them immediately, as to minimize a ripple effect on the global flow of goods.

Aa stated by Greg Knowler (Senior Asia Editor) in JOC:

“The Dutch Shippers’ Council in The Netherlands brought this issue before their court and a judgement was reached quickly that found container terminals could not charge € 1.000 per container, but only the normal handling fees of € 250. While the judgement only applies to members of the Dutch Shippers’ Council, it is believed other shippers groups are preparing to take the same legal action.”

As this is a complex situation, that seldom occurs, it is likely that this bankruptcy case could drag on for years.

Our Harmony members are in the process of finding the most sensible solutions and we are keeping a close watch on how this develops. We are informing the assignees concerned on a case-by-case basis and we are investigating the insurance implications. We will be updating our clients and the RES Forum membership with regular news updates.