Korea’s Hanjin Shipping Co., the world’s seventh largest shipping line by capacity, filed for bankruptcy protection with the Seoul Central District Court on Wednesday, August 31. Hanjin had recently been struggling financially, with $5.5 billion in debt as of the end of June, and losses in four of the last five years. The court will determine if Hanjin should be liquidated or give a chance to survive with a restructuring.
Hanjin will stop releasing equipment for new bookings and essentially stop accepting bookings for an interim period. They advised that shipments currently on the water will continue to move to their respective destination ports. Odyssey suggests that clients that currently utilize Hanjin’s service consider re-booking existing orders with alternative carriers and book new orders with alternative carriers going forward.
Yang Ming, a member of the CKYHE vessel sharing alliance along with Hanjin, has issued contingency plans to mitigate risks associated with the receivership. At present Yang Ming is not accepting any bookings on Hanjin or Hanjin owned vessels. Existing bookings on Hanjin vessels will be rolled to next available non Hanjin vessels.
Evergreen has also curtailed activity with Hanjin. No Evergreen Line cargo will be loaded on vessels owned or operated by Hanjin Shipping and Hanjin cargo will not be allowed to load on vessels owned/operated by Evergreen.
Similar plans may be expected from others.
More information from Wall Street Journal regarding the filing can be found here.
We will continue to post updates as this situation is still quite fluid.