September 2, 2016 – South Korea’s Hanjin Shipping Co. filed for bankruptcy protection this week, setting off a chain of events that is still unfolding throughout the international maritime community. As the 7th largest shipping line in the world, Hanjin’s bankruptcy crisis has caused a major interruption in global trade and uncertainty about the carrier’s future has raised concerns that its ships could be seized by creditors, leading to congestion at many ports. Hanjin has stopped accepting cargo and most U.S. ports have announced plans to reject Hanjin vessels and containers. The South Korean government has taken a hard line against supporting Hanjin through this fallout, and it is still unknown to what extent, if any, fellow South Korean carrier Hyundai Merchant Marine will step in to purchase any of Hanjin’s healthy assets and help with the overall transition.
In addition to the direct impact on Hanjin vessels and cargo, there has been an immediate rise in shipping rates on Transpacific Eastbound trade lane. Rates were already set to increase in September as we enter the peak shipping season, and the reduction of capacity from Hanjin’s fleet has compounded the situation. We have already seen a significant increase in rates this week, and the trend is expected to continue throughout the month as carriers capitalize on dramatically reduced shipping capacity.
On all trade lanes, carriers previously vessel-sharing with Hanjin are not accepting bookings on Hanjin vessels and are working to update their sailing schedules with replacement vessels.
We are closely monitoring the development of this situation and its impact on our customers. For more information, please contact your customer service representative.