Hanjin container line collapse

[bootneck]

Just read this about Hanjin of South Korea filing for receivership, with the obvious worldwide effect.

"Hanjin Shipping elected to file for court receivership on Tuesday, the first step towards what will be the largest container line bankruptcy in history – six times larger than the collapse of United States Lines three decades ago, the previous record holder. Hanjin operates 98 container ships totalling 600,000 TEU, 11 port terminals and 74 sea routes, in addition to bulker operations."

Much of their fleet is currently at sea (some have now anchored where they are, others have been seized), probably stacked full of exports bound for western countries, but are being refused entry into their destination ports, due to "concerns that the firm cannot pay port and stevedoring costs."

South Korea exports Electronic equipment: Samsung TV's and smartphones; LG TV's, plus Vehicles: Hyundai cars and car batteries etc. and there will be a massive amount of this not reaching their destinations or buyers

South Korea manufactures kits as well; Academy, Model Masters, KA-Models, DEF models and Wolfpack decals are just some of the model manufacturers out there. I bet there are quite a few in those containers and giving the importers/distributors a cause for concern with their orders!

Add to this, Hanjin routes to China and Japan and picks up stuff there so the impact could be even wider.

Further update: Nine of Hanjin's ships are British flagged (list below), registered in Douglas, Isle of Man; therefore this means that they will have British officers crewing so another impact on those poor blighters.

Mike

British registered Hanjin ships:

Hanjin Sooho

Hanjin Asia

Hanjin Blue Ocean

Hanjin Europe

Hanjin Harmony

Hanjin Green Earth

Hanjin America

Hanjin Gold

Hanjin Africa

[Jamie @ Sovereign Hobbies]

Yikes. Fortunately our South Korean supplies come by air mail, but the above is potentially a disaster for retailers globally.

[bootneck]

Yikes. Fortunately our South Korean supplies come by air mail, but the above is potentially a disaster for retailers globally.

Do you importers and distributors pay, or commit to pay, the manufacturers for the goods ordered in advance? Or would it be payment on delivery? I'm thinking about our friends at Pocketbond and Creative Models etc.

[Jamie @ Sovereign Hobbies]

I couldn't answer for them.

We are invoiced up front for South Korean goods, and pay at time of shipment.

For those businesses we export Colourcoats to, they pay part up front and the balance after delivery.

[bootneck]

Could be a worrying time. Reading the news, it looks as if many of those ships have had to anchor up outside their destination ports, or have been seized in those ports. These ships carry anything between 4,000 and 13,000 TEU (twenty foot sized containers). Either way, there's thousands of tons of stock that probably won't find its way to the importer's or distributors; mainly as they are likely to be impounded pending future court cases. It is also another Risk element and likely to put insurances up again.

[bentwaters81tfw]

Usually goods are shipped against letters of credit, or bankers guarantee. Some is cash up front. Seafreight charges are either upfront or collect, which you cant do unless the cargo is discharged. The new Samsung S7 is due out PDQ, so I wonder if they will be held up. Christmas stuff as well, although that's usually here in August. It's not salvage, so goods should get through, even if delayed.

Just checked AIS. Only one vessel in Hamburg. The rest of Northern Europe shows no other Hanjin vessels.

Edited September 1, 2016 by bentwaters81tfw

[Bonehammer]

I Remember seeing the ,"enzhineer yermoskin" and "Captain Smirnov" out of the Trieste harbour for years when Blasco went bankrupt. Sailors couldn't abandon shop without losing their claims to pay, so they were effectively prisoners, living off handouts from other ships' crews. This affects a lot of people but the fellows on board are likely to have the greatest worsening of Life quality. Hope the issue gets resolvwd quickly.

[bootneck]

........ The new Samsung S7 is due out PDQ, so I wonder if they will be held up

Just checked AIS. Only one vessel in Hamburg. The rest of Northern Europe shows no other Hanjin vessels.

I've just heard on the news that Samsung has delayed the S7 until later in the year, someone alleged it was to do with them exploding when being charged?

AIS is good. The last time I looked there were two Westbound, one in the western Med heading for a stop at Gibraltar; the other off Sri Lanka heading for the Suez and on to Gibraltar. Presume both would then have stops in northern Europe. I think the one at Hamburg may have now been siezed or impounded.

Mike

[Dave Swindell]

Further update: Nine of Hanjin's ships are British flagged (list below), registered in Douglas, Isle of Man; therefore this means that they will have British officers crewing so another impact on those poor blighters.

Mike

Mike,

The days of British flagged ships being required to be manned by British officers is long gone! I doubt if there's many, if any at all, British officers affected by this. Of all the officers on my current ship when I first joined it 4 years ago, and when it was still registered in Bristol, I was the only Brit. League of nations is the norm these days, irrespective of vessel flag.

[bentwaters81tfw]

Latest.

https://felixstowedocker.blogspot.co.uk/2016/09/hanjin-shipping-files-for-receivership.html?utm_source=feedburner&utm_medium=email&utm_campaign=Feed:+FelixstoweDockers+(Felixstowe+Dockers)

[bootneck]

Thanks for this update.

The concerns for the cargo owners, and those awaiting essential deliveries etc., looks to becoming very real as more ports are refusing to allow the ships to dock and unload.

The potential for cargo to be stranded, perhaps indefinitely, is unnerving for many – particularly as industry insiders and analysts believe that Hanjin has little chance of being rehabilitated and its assets will eventually be liquidated.

“The biggest problem is what is going to happen to cargos at sea. We are just praying that our cargos are not seized,” said Ra Kyung-moon, executive vice president at Forman Shipping, a freight-forwarding firm in Seoul.

Freight-forwarding firms, which organize shipments, may be held liable for customer cargo that doesn’t arrive and are also worried about the recovery of funds paid to Hanjin in advance for services promised.

[bentwaters81tfw]

Latest:

https://felixstowedocker.blogspot.co.uk/2016/09/hanjin-update-45-of-hanjin-shipping.html?utm_source=feedburner&utm_medium=email&utm_campaign=Feed:+FelixstoweDockers+(Felixstowe+Dockers)

[bootneck]

over 40 ships stranded at sea. That's approx. 280,000 TEU (20ft container equivalent units, although some will be 40 or 60ft units) If we work out a hypothetical 50-50 ratio of those going out full and those returning empty then that means there could be around 140,000 containers full of goods that won't be delivered in time to match supplier/customer requirements. Some of these vessels also have refrigerated space for perishable goods and probably most of that will be lost.

Just imagine what a single 20ft container (TEU) could carry and then multiply that by 140,000!

Some data facts: Hanjin, at the time of the collapse announcement, has 89 container ships

37 vessels owned - totalling 274,222 TEU

51 vessels chartered - totalling 328,170 TEU

A total of 602,392 TEU. A substantial amount of these are probably empty but taking up valuable space at dockside facilities all around the world.

I can envisage shortages of most commodities and therefore prices going up.

Mike

[Graham Boak]

UK import prices will be going up anyway, at least those not pre-paid or in long-term agreements. However the top-up effect of this failure may not be as large as feared. The key questions are the proportion of this shipping headed to UK markets (perhaps 1 in 10?); what share this is of the entire UK import trade (which totals £40.2 bn per month); and which items are likely to be in short supply? 1,400 containers would be a small amount of the total trade: Tilbury alone handles over 500,000 per year, Hull 9,000 per month (OK, that includes import and export, and some of Hull's trade comes from Tilbury).

If all it means is that we buy new mobile phone A rather than B, and UK/European/US produce rather than that from further away, then a small change in lifestyle will be all we see.

[bootneck]

Someone has mentioned that mobile phones go by air nowadays. One report said that one of the commodities was a lot of LG and Samsung smart TV's and such like in transit to Europe and other western destinations.

[Dave Swindell]

over 40 ships stranded at sea. That's approx. 280,000 TEU (20ft container equivalent units, although some will be 40 or 60ft units) If we work out a hypothetical 50-50 ratio of those going out full and those returning empty then that means there could be around 140,000 containers full of goods that won't be delivered in time to match supplier/customer requirements. Some of these vessels also have refrigerated space for perishable goods and probably most of that will be lost.

Just imagine what a single 20ft container (TEU) could carry and then multiply that by 140,000!

Some data facts: Hanjin, at the time of the collapse announcement, has 89 container ships

37 vessels owned - totalling 274,222 TEU

51 vessels chartered - totalling 328,170 TEU

A total of 602,392 TEU. A substantial amount of these are probably empty but taking up valuable space at dockside facilities all around the world.

I can envisage shortages of most commodities and therefore prices going up.

Mike

1 20ft container = 1 TEU, a 40ft container is 2 TEU

Most containers on boxboats these days are 40ft, there's a few 45ft boxes on ships, the rest will be 20's, none will be 60's.

Just because the ship is stopped doesn't mean that the refrigerated cargo will be lost, as long as there's fuel to keep the generators going it will be fine, a few days or even weeks extra isn't going to affect most products as long as the temperature & CA is maintained.

The total capacity of 602,392 TEU you quote is the total slot capacity of the ships in the fleet, not the number of owned or leased containers. Ships rarely sail to max TEU capacity, often being limited to less by draft restrictions, stack weight limits, stowage restrictions and currently due to market overcapacity

A lot of Hanjin containers will be on CKYHE alliance partner vessels, and conversly the CKYHE alliance partners will have their boxes on Hanjin vessels and will be affected by this.

Some boxes will be dockside as you say, and a lot will be landside.

Hanjin was a global player, only a small number of ships will be on the Europe trade, and of those only a small percentage of the cargo will be UK bound.

There are quite a few other players in the far east/europe trade, so yes, there may be a few hiccups in short term supply of some commodities which may see some items go up in price, but overall I doubt there'll be any significant noticeable impact on the UK consumer.

[colin]

So it looks like the worlds not going to end then

[wyverns4]

So it looks like the worlds not going to end then

That's good to know then.

Best take off my nuclear proof woolly underwear and resume normal operations.

Christian, exiled to africa

[Graham Boak]

Not having the latest mobile phone may be close to the end of the world for some...