On August 30, Hanjin Shipping creditors decided to end the voluntary agreement for the company, increasing the likelihood of its liquidation. Then, a Singaporean court detained the Hanjin Rome, a 5,308-TEU ship, at a Singaporean port after German shipowner Rickmers asked for the provisional seizure with Hanjin Shipping failing to pay the charter rate for another ship. The Hanjin Rome is a vessel directly owned by Hanjin Shipping.
Refusals of access are following one after another, too. At present, a large number of ports located in China, Spain, the United States and the like are doing so, demanding cash payment with regard to docking and cargo unloading costs.
Hanjin Shipping is currently running 100 container carriers, which are divided into 63 chartered and 37 owned. With its business at a dead end, South Korean shippers are busy trying to find alternatives. According to industry sources, Samsung Electronics shipped out 56% of its electronics exports from South Korea to North America for last year by using Hanjin ships and the percentage reached 23.2% for LG Electronics during the same period.
Hanjin Shipping’s liquidation is likely to be a boon for the others in the industry by pushing up freight charges. Hanjin Shipping ranks seventh in the world in container shipping capacity but its market share in the Asia-Pacific routes is 7%, which is comparable to Maersk’s 9% and MSC’s 7%. According to the Korea Maritime Institute, the liquidation is predicted to raise the charges by 27.3% and 47.2% with respect to the Americas and Europe, respectively.