Hanjin bites the dust

[spuwho]

Remember those drawn out negotiations with Hanjin on building a port in Jax?

Remember all of those incentives we and the state were throwing at them?

It appears Jaxport played their cards well.

Per Reuters:

http://mobile.reuters.com/article/idUSKCN11603N 

Hanjin is getting denied port access around the world. This will cause a huge hit up in Savannah and causing a global logistics crisis.

Undelivered products sitting in harbors.

[jaxlongtimer]

Hanjin is toast.  Headed for complete liquidation.  A glut of vessels on the global market led to its demise.  Given their past history with JPA and their continued shipping here via an alliance, this should be front page news in Jax but nary a word in local media (I actually haven't seen a single mention).  So, what's the impact on the port?  On the "case" for dredging or not?  Will other lines follow in their footsteps?

Appears Hanjin represented 4 Asian ships calling here three years ago when they announced plans to cancel their $300 million Jax cargo terminal:

http://jacksonville.com/news/metro/2013-03-21/story/hanjin-decides-against-jacksonville-cargo-terminal

Hanjin will join an alliance with other steamship lines to add a new service to the TraPac terminal in May, bringing the frequency of service to four ships a week.

Jacksonville will have 15 shipping carriers with Asian trade routes calling on the port, compared to just one carrier five years ago.

http://www.wsj.com/articles/hanjin-shipping-bankruptcy-further-consolidation-unlikely-to-help-industrys-capacity-glut-1472841698

Wall Street Journal
By Costas Paris and
In-Soo Nam
Sept. 2, 2016 2:41 p.m. ET

The increasingly likely demise of one of the world's biggest container-shipping companies may offer some short-term relief to a sector battered by a global downturn in trade. It also could hasten further industry consolidation.

What the collapse of South Korea's Hanjin Shipping Co. won't likely do is solve the shipping industry's biggest problem: 30% more space on ships than cargo to fill it amid a world-wide trading slump.

As the Korean government signals it is steering Hanjin toward liquidation, that would make the Korean carrier the largest container-shipping failure in history by far, says shipping consulting firm Alphaliner.

The news sent tremors through an already reeling industry, based mostly in Europe and Asia. Within the space of a year shipowners have gone from ordering ships in droves to scrapping them, shipyards have been shrinking and the biggest companies have been forming alliances that share ships, networks and port calls to cut costs.

"Hanjin Shipping's receivership filing brings to the surface the core the industry's problem: An oversupplied market where too many ships fight for cargoes in a world where trade barely grows," said Basil Karatzas, of New York-based Karatzas Maritime Advisors Co.

Sinking Trade Claims Another Victim in Asia

South Korea's biggest shipping line, Hanjin Shipping Co., filed for bankruptcy protection on Wednesday as falling trade volumes claimed another victim. Shipping is one of the sectors in which South Korea is a global leader, so what does this recent collapse tell us about world trade? Photo: Getty Images

A jump in rates following Hanjin's filing might give a fleeting breather to the more deep pocketed European operators like A.P. Møller-Maersk​A/S 's Maersk Line, CMA CGM SA and Hapag-Lloyd AG .

But Hanjin's woes mean trouble for individual shipowners that lease to it, like Danaos Corp. , Navios Maritime Partners LP and Seaspan Corp. Those three have a combined exposure of more than $1 billion to the Korean shipper, according to shipping executives.​

"Like everybody else we are still waiting to see what the final outcome of this case will be," a spokeswoman for Navios said.

Hanjin is sparking fears among retailers in the U.S. and elsewhere during the busy holiday-stocking season. There could be "millions of dollars" of goods stranded, according to the National Retail Federation.

The Korean carrier moves 3% of containers globally and up to 10% of the ones shipped between Asia and Europe. But 61 of its 98 ships are chartered, not owned.

If Hanjin ends up liquidating its assets rather than restructuring, those ships will find homes with other carriers.

And while Hanjin's bankruptcy filing sent spot shipping rates soaring—by as much as 40% on routes from Asia​to the Americas, according to Drewry Shipping Consultants Ltd.—those weren't expected to stick. Starting in September Lars Jensen, chief executive of SeaIntel Consulting in Copenhagen said he expects the effect of the Hanjin filing on rates to be "minimal" and that rates will remain below sustainable levels.

The biggest initial hit could come to retailers in the U.S. and elsewhere waiting on goods for the holidays. Not knowing whether they would get paid, ports and handlers from South Korea to China, the U.S., Canada, Spain and elsewhere have refused to handle its cargo. That has stranded 45 ships at sea, according to the company, and more than half a million containers.

Berthing and unloading services for Hanjin ships resumed at South Korea's main ports on Friday after the government said port authorities would guarantee payments for service providers. A Hanjin spokeswoman said the company also plans to take action in the U.S. and other countries, including filing for protection of assets, to prevent further seizure of ships.

Danaos has a $560 million exposure to Hanjin. Its chief operating officer, Iraklis Prokopakis, said he expects the Seoul court handling Hanjin's receivership to rule later this month on the company's charters.

"We will then have to decide whether we will recharter ships to another company and claim our damages from Hanjin, or continue with them at different freight rates which will likely be lower," Mr. Prokopakis said. "So it's a setback, but hopefully not a total disaster."

But industry executives said any claims to Hanjin could take up to 10 years to be settled, and Mr. Prokopakis said if Hanjin is liquidated, "we won't recover a substantial part of our claims."

Seaspan didn't immediately respond to requests for comment.

With goods stuck on its ships, Hanjin said Friday that it has been suspended from the alliance it belongs to, the CKYHE Alliance. Its Asian shipping partners are rushing to find alternative arrangements to ship electronics, clothing, furniture and other goods as retailers in the U.S. and Europe are stockpiling for the holidays and rivals are boosting freight rates.

The South Korean government has signaled that it sees no future for Hanjin Shipping, rejecting the idea of a merger and calling on its smaller domestic rival Hyundai​Merchant Marine Co. to buy healthy assets from the troubled firm.

The Seoul central district court has given Hanjin until Nov. 25 to submit a rehabilitation plan that will determine whether it can continue operating. Given the government's stance, this is seen as granting Hanjin more time for an orderly liquidation.

"The court doesn't want to stir chaos by ordering an immediate liquidation. But eventually Hanjin will be wound up," said Lee Sang-jae, an analyst with Eugene Investment Securities Co.

The filing with the Seoul Central District Court on Friday came just two days after its creditors discontinued providing a lifeline after years of financial assistance failed to keep the company afloat.

[SightseerLounge]

Are they minimizing the ripple effect of this shipper going down?

It seems like some people are very worried about getting their goodies for Christmas!

[spuwho]

Are they minimizing the ripple effect of this shipper going down?

It seems like some people are very worried about getting their goodies for Christmas!

Reports are that LG has several ships full of their next gen cell phone sitting in harbors worldwide.  They had to fly in several for the launch in several cities due to marketing commitments, but stores cant get them as they sit and wait.

Savannah has a large relationship with Hanjin (I am sure its Hanjin) to ship wood pellets to Europe, a major export of Georgia.

[BenderRodriguez]

So who's stocks do I need to watch to potentially make tons of money off of this shit-storm down the line?