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Hanjin Shipping Co Ltd has filed for chapter 15 bankruptcy:
Troubled container shipper Hanjin Shipping Co Ltd (117930.KS) has filed for bankruptcy in the United States to protect its vessels from being seized by creditors, the [Wall Street Journal reported], citing a filing by the South Korean firm.
The company's troubles are causing some alarm about the effects on global trade:
Hanjin Shipping's market share stands at 2.9 percent of total container capacity, but the shipper's recent filing for court receivership is putting global commerce in a tight spot ahead of the key holiday season. The unraveling has sent spot freight rates soaring in recent days while its vessels are being blocked from docks at ports in large numbers, stranding their contents for now.
"There is an immediate impact, as shipments already loaded on Hanjin ships are expected to face delays as a result of creditor actions, and recovery could take weeks or even months to be resolved," said H.J. Tan, a consultant at Alphaliner. "Shipments that have not been loaded will also need to be unstuffed, and shippers will need to find alternative carriers that are able to carry them."
The good news is that since Hanjin's global market share is relatively small, it can be filled soon by competitors, he said. Hyundai Merchant Marine plans to step up services by deploying at least 13 of its ships to fill demand on two routes that had been exclusive to Hanjin, Reuters reported. [...] "The timing is unfortunate, as it coincides with the peak shipping season to the U.S. and Europe that typically runs from July to September," Tan said. For now, retailers are also watching the situation unfold.
(Score: 3, Informative) by Anonymous Coward on Monday September 05 2016, @11:37AM
1. The Baltic Dry Index has been bottomming along for many months now, indicating that global trade is basically crap. If this affects the industry you work in, then you'd better be making arrangements.
2. South Korea's economy is under threat because no one wants to buy what they make at the volumes they produce it.
3. Other manufacturing countries are in the same boat.
If this persists (and it is likely to) then the world will need to reset, because there is not enough real wealth in the world to mop up the current excess production in useless crap like toys and electronics. This will be destabilizing at the very least socially but it is a sign that militarily things may continue to heat up.
(Score: 2) by takyon on Monday September 05 2016, @12:01PM
We'll have to give the kids crappy 3D-printed thermoplastic toys instead.
[SIG] 10/28/2017: Soylent Upgrade v14 [soylentnews.org]
(Score: 0) by Anonymous Coward on Monday September 05 2016, @01:15PM
> 1. The Baltic Dry Index has been bottomming along for many months now, indicating that global trade is basically crap.
Thanks for this reference, had not seen BDI before.
A quick look at the wikipedia entry suggests that the low BDI could also be caused by an oversupply of ships... Like most single number "indexes", it's probably necessary to look deeper, to see why it's moving?
(Score: 2) by butthurt on Monday September 05 2016, @10:05PM
There was an earlier story, Oceanic Shipping Prices Reach Record Low [soylentnews.org].
(Score: 1) by Francis on Monday September 05 2016, @03:56PM
Also, it might be a relatively small company globally, but not necessarily in the local context. Here they have a pretty significant amount of port space and a huge portion of what gets shipped from China to the US comes through the ports here.
I have no doubt that other firms are going to fill the void before too long, but it's going to significantly increase the cost of shipping in the short term.
(Score: 0) by Anonymous Coward on Monday September 05 2016, @04:44PM
> I have no doubt that other firms are going to fill the void before too long, but it's going to significantly increase the cost of shipping in the short term.
They already are, and they already have. Pricing on those same routes has gone up more than 50%.
The cost of shipping a 40-foot container on the Busan-Los Angeles route has jumped about 55 percent, from $1,100 to around $1,700
http://www.reuters.com/article/us-hanjin-shipping-debt-ports-idUSKCN117377 [reuters.com]
I'd like to see the cost of a container 5 years ago. I bet even these new higher prices are less than they were before China started flirting with recession.
(Score: 0) by Anonymous Coward on Monday September 05 2016, @04:52PM
> I'd like to see the cost of a container 5 years ago. I bet even these new higher prices are less than they were before China started flirting with recession.
Here is some generic shipping price info for China, the "China Containerized Freight Index"
https://www.flexport.com/blog/why-are-ocean-freight-rates-so-low/ [flexport.com]
TL;DR in 2014 the index was about 1050, now it is ~700.
Total shipping capacity has increased by 28% since Jan 1st, 2012.
(Score: 1) by khallow on Tuesday September 06 2016, @04:05AM
If this persists (and it is likely to) then the world will need to reset, because there is not enough real wealth in the world to mop up the current excess production in useless crap like toys and electronics. This will be destabilizing at the very least socially but it is a sign that militarily things may continue to heat up.
If there isn't enough real wealth to mop up "excess production", then use fake wealth. Duh. Another weighty problem solved with the power of the internet.
Sorry, but in reality this is an absurd worry. The above manufacturers will figure out something better to make, some of the less efficient ones will go away, and life will move on. That's what a recession is from the manufacturing point of view. No need for "resets".
And I'd say that the spectacular success of many toy and electronics manufacturers indicates that those products are not "useless crap".