Hanjin Shipping has finally been declared bankrupt by a court in Seoul five months after the Korean shipping line entered receivership and sent global supply chains into convulsions, ending months of uncertainty and the carrier’s 40-year history.
According to Lloyd’s List, the Seoul Central District Court will choose a trustee to liquidate what is left of Hanjin’s assets to repay some of the money owed to creditors, who will have until 1 May to submit their right to claim. It said the court, as well as an auditor’s report, had concluded Hanjin would be worth more liquidated than as a going concern. In a to creditors note on Hanjin’s website, the Korean line explained: “After the bankruptcy sentence is filed, a bankruptcy foundation will be established, a bankruptcy trustee will be elected, and the remaining assets of Hanjin Shipping will be sold and creditors will be reimbursed in accordance with procedures and regulations established under the permission of the court, led by the bankruptcy trustee.”
VesselsValue estimates that Hanjin’s remaining vessels are worth around $986 million, including 29 containerships with a total capacity of 230,000 teu worth roughly US$755 million, Lloyd’s List added. Analysts including Drewry and SeaIntel predicted as long ago as last September that despite efforts to keep Hanjin going in some form, its days as a major global player were over, in part because of fears among customers of booking again with a line that had caused them such problems in their supply chains. SeaIntel had said that even if there was any resurrection of Hanjin, it was likely to be in the form of a much smaller carrier, possibly only with a narrow niche focus.
The collapse of Hanjin late last August stranded the cargo of thousands of customers of Hanjin and its alliance partners, leading to huge supply-chain disruptions for many companies and rising ocean freight rates, particularly on Hanjin’s strongest market, the transpacific.
Among the many implications of the shipping line’s collapse has been that cargo owners are subsequently demanding more financial transparency from carriers before entrusting them with their cargo. And with shippers expected to pay much closer attention to the financial risks when selecting carriers in future, carriers themselves need to be sure of the financial health of their alliance and service partners, or potentially risk losing customers, Drewry noted last October.
As reported in Feburary in Lloyd’s Loading List, contract discussions between container lines and their customers are very different this year from previous years due to the disruptions to supply chains following Hanjin’s bankruptcy last year, according to Maersk Line’s Asia Pacific CEO, with customers now stressing stability and avoiding risk to supply chains, not just rates.
In an interview with Lloyd’s Loading List following the publication of A.P. Møller-Mærsk’s annual report, Robbert van Trooijen said Maersk and other lines were still benefiting from the fallout of Hanjin’s bankruptcy last year. “I think in contract negotiations for Europe and the Pacific, the discussions we’re having with customers is more about reliability of the supply chain and the stability of our offering,” he said.
“Customers are very much interested in avoiding any risk to supply chains this year. So discussions are very different than in previous years, which was all about freight rates.”
Some commentators have described a two-tier system developing, with shippers gravitating towards financially stronger container lines in contract renewal discussions, and with some customers prepared to pay a premium to ensure their cargo moves on the vessels of one of the larger, more financially secure lines.
Hanjin finally declared bankrupt
