As ocean carriers around the world struggle with overcapacity amid a slump in global trade, Hanjin Shipping filed for bankruptcy protection on Wednesday, August 31, 2016. Immediately in response to this announcement, freight forwarders are scrambling to book new cargo with alternate carriers to ensure there is no disruption for customers - decisions that are reinforced by Hanjin Shipping’s own alliance members that are indicating they will neither tender their cargo on Hanjin vessels or allow Hanjin containers on their vessels.
Statements from Hanjin Shipping indicate that they will do their best to discharge their responsibilities as it relates to cargo currently in its possession and maintain services. However, many alliance members as well as network creditors – such as ports, draymen, rail ramps – indicate that Hanjin’s path forward will be very difficult. Shippers and consignees with cargo in the Hanjin network will face challenges, time delays and additional costs to move containers out of its system. Without the support of current customers, alliance members or network agents, the future for Hanjin is bleak.
This will lead to decreased capacity in the lanes that Hanjin primarily operates in, specifically to and from Asia, Europe and North America, which will lead to rolled bookings on other carriers and sharp increases in freight rates as the other carriers capitalize on the unstable market in order to return themselves to profitability.