Hanjin Shipping

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Hanjin Shipping Co. Ltd
Hanjin Shipping
Native name
한진해운
IndustryContainerization, shipping, ocean freight transport
FoundedMay 16, 1977 (1977-05-16)
DefunctFebruary 17, 2017 (2017-02-17)
FateBankruptcy
Headquarters
South Korea
ServicesCargo transport, container terminal management
OwnerHanjin
ParentKorean Air (43.26%)
Websitehanjin.com

Hanjin Shipping Co., Ltd. was a South Korean integrated logistics and container transport company. Prior to its liquidation, Hanjin Shipping was South Korea's largest container line and one of the world's top ten container carriers in terms of capacity.[citation needed]

Overview[]

Hanjin shipping formerly operated some 60 liner and tramper services around the globe, transporting over 100 million tons of cargo annually. Its fleet consisted of many container ships, bulk and LNG carriers. Hanjin Shipping had its own subsidiaries dedicated to ocean transportation and terminal operation and it had several branch offices in various countries.

On February 17, 2017, Hanjin Shipping Co. was declared bankrupt by South Korean courts.[1]

Bankruptcy[]

Hanjin container

Insolvency[]

Hanjin Shipping's insolvency was caused in part by overcapacity in the container ship industry.[2]

Liquidation[]

In April 2016, Hanjin applied to its creditors for debt restructuring, in order to avoid formal insolvency proceedings.[3] On August 31, 2016, Hanjin filed for receivership at the Seoul Central District Court and requested the court to freeze its assets, after losing support from its banks the previous day.[4] After Hanjin's receivership was publicized, creditors confiscated assets and Hanjin vessels experienced access issues in ports globally because service providers were not informed if and how they would be paid to load and unload Hanjin vessels .[5]

On September 2, 2016 Hanjin Shipping Co. filed papers in U.S. Bankruptcy court in Newark, New Jersey that would allow its vessels to dock without its ships, cargo or equipment being confiscated by creditors.

Shortly after its receivership, experts predicted Hanjin Shipping was likely to be liquidated.[6] In the following months, Hanjin Shipping announced it would shut down offices around the world,[7] lay-off workers,[8][9] sell remaining assets,[10] and discontinue most services.

On February 17, 2017, Hanjin Shipping Co. was declared bankrupt by South Korean courts, with a court order to be liquidated.[1]

Aftermath and legacy[]

Hanjin 20 foot containers

Hanjin Shipping was the largest bankruptcy in the container transport industry[11] and it caused worldwide supply chain and shipping disruption as cargo ships were left stuck at ports and canals waiting for cash payments.[4] Hanjin's bankruptcy created a massive ripple effect. Other businesses that rely on physical products found themselves without the expected revenue from inventory that became stuck at sea. The containers of other container ship companies also became stranded on Hanjin vessels.[12] Hanjin collapsed at an especially inconvenient time for retailers furnishing their inventories with imported items in preparation for a seasonal uptick in Thanksgiving, Christmas, Black Friday, and New Year's sales. Although large companies such as Nike were affected, the repercussions were more prominent on smaller companies.[13]

In February 2017, SM Line, a new shipping firm formed by Samra Midas (SM) Group, purchased five vessels previously owned by Hanjin.[14] In March, SM Line acquired two of Hanjin Shipping's terminals in Korea, in the cities of Gwangyang and Incheon.[15]

In August 2017, a South Korean bankruptcy trustee which was appointed to manage the liquidation of Hanjin Shipping reported that it had only collected 220 million USD from the sale of Hanjin's assets. This sum amounts to only 2% of the US$10.5 billion total debt Hanjin owes to its creditors.[16][17][18]

Services[]

  • Container – Transported approximately 3.7 million TEU containers a year. This service consisted of 24 container ships[19] which allowed for this service to produce such an output per year. Recently, in 2010 the South Korean shipping company was the first to introduce a 10,000 TEU class carrier ship, which travelled between Asia and Europe.[13][20]
  • Bulk - This division of the shipping company delivered a variety of resources and raw materials through its ‘contract of affreightment’ with other companies. The division's ships were LNG and VLCC ships which carried crude oil and chemicals.[20]
  • Terminal – The shipping terminals for this company were distributed internationally. There were fourteen dock yards that this company owned: four in Korea, two in the United States of America, two in Japan, and the rest in Spain, Taiwan, Vietnam and Belgium.[20]

Fleet[]

Container ship classes of Hanjin Shipping
Ship class Built Capacity (TEU) Ships in class Notes
Sooho-class 2012–2013 13,102 9

See also[]

References[]

  1. ^ Jump up to: a b Nam, In-Soo (February 16, 2017), Hanjin Shipping Is Declared Bankrupt, New York City: The Wall Street Journal, retrieved February 17, 2017
  2. ^ Northam, Jackie (August 20, 2016). "Amid Industry Downturn, Global Shipping Sees Record-Low Growth". NPR. Retrieved February 19, 2017.
  3. ^ Nam, In-soo. "Hanjin Shipping Asks Creditor to Restructure Debt". wsj.com. Wall Street Journal. Retrieved 26 April 2016.
  4. ^ Jump up to: a b "Hanjin Shipping files for receivership, as ports turn away its vessels". Reuters. Retrieved 31 August 2016.
  5. ^ "Shipping collapse leaves freight stranded, portends weak economy". 2016-09-05. Retrieved 2016-09-05.
  6. ^ "Hanjin Shipping liquidation likely, experts say". JOC.com. Retrieved February 19, 2017.
  7. ^ Nam, In-soo (October 24, 2016). "Hanjin Shipping to Close European Operations". Wall Street Journal. Retrieved February 19, 2017.
  8. ^ "Hanjin Shipping layoff 2,500 marine crew until end of January". Maritime Herald. November 12, 2016. Retrieved February 19, 2017.
  9. ^ "Hanjin Shipping Lays Off Over 500 Mariners". Maritime Executive. 2016-11-10. Retrieved February 19, 2017.
  10. ^ "Here's Who Might Bid for Hanjin Shipping's Assets". Fortune - Reuters. October 17, 2016. Retrieved February 19, 2017.
  11. ^ "Move by South Korea's Hanjin Shipping Roils Global Trade". Wall Street Journal. August 31, 2016. Retrieved February 19, 2017.
  12. ^ Solomon, Mark (September 7, 2016). "Fallout from Hanjin collapse to be amplified by complex web of ship alliances, experts say". Retrieved September 30, 2020.
  13. ^ Jump up to: a b "HANJIN SHIPPING : Customer Advisory View". hanjin.com. Retrieved 2016-10-20.
  14. ^ "SM Line's 1st Service to Include 5 Hanjin Boxships". World Maritime News. February 23, 2017. Retrieved July 10, 2017.
  15. ^ Zeng, Xiaolin (March 14, 2017). "SM Line buys Hanjin Shipping's Gwangyang terminal | IHS Fairplay". fairplay.ihs.com. Fairplay. Retrieved July 10, 2017.
  16. ^ http://www.globaltrademag.com/global-logistics/final-bill-hanjin-shipping-bankruptcy-10-billion
  17. ^ http://www.tradewindsnews.com/finance/1322963/hanjin-shipping-sales-fail-to-plug-usd-105bn-hole
  18. ^ http://business.mb.com.ph/2017/08/09/hanjin-shipping-raises-fraction-of-10-5-b-in-bankruptcy-claims/
  19. ^ "Alphaliner - TOP 100 - Existing fleet on October 2016". alphaliner.com. Retrieved 2016-11-30.
  20. ^ Jump up to: a b c "Overview". Service. Hanjin Shipping. Archived from the original on 25 July 2013. Retrieved 14 August 2013.

External links[]

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