Hanjin Shipping quietly collapses

a reply to: Bedlam

APM terminal in Houston closed a bout a year ago and was taken over by the Port of Houston Authority. At the time it was very difficult to find any container yards that would accept Maersk.

This should cause the price of shipping containers to drop as when Hanjin shipping containers get to the distributors in the US there will not be money to return them to the over seas factories.

Years ago the chinese claimed it was cheaper for them to build new shipping containers then it cost to ship empty containers back to china from the US.
Empty containers now amount to a third of all outbound West Coast port traffic in the US.

a reply to: charlyv

It might help little Ebay people like me in the continental US though, because some of our competition just went *poof*




Now maybe my second hand toys and other junk listed on Ebay could have a pickup in sales?

originally posted by: the2ofusr1
a reply to: Montana

If what Pepe Escobar writes is even close to accurate then the biggest economy in the world has its sights on the biggest market in the world .And it will all be linked by rail .US may be able to rule the seas but if its a land route then there is no way of a blockade . Think of a 3 day train ride to Europe by rail compared to a 2 to 3 week boat ride .

""Putin and Xi met for the 15th time just after Xi concluded a three-nation Eurasia tour – Serbia, Poland and Uzbekistan – where, alongside Foreign Minister Wang Yi, he explicitly laid down the bridge between the New Silk Roads, or One Belt, One Road (OBOR), as they are officially referred to in China, and the development of the Shanghai Cooperation Organization (SCO).

Not by accident China has now also struck a “comprehensive strategic partnership” with Serbia, Poland and Uzbekistan – on the way to weaving a broad “China-Europe strategic partnership” in parallel to the development of the SCO.

This already translates into projects such as the Hungary-Serbia railway; the Pupin Bridge on the Danube River in Belgrade; the expansion and upgrading of a power plant in Kostolac; what Beijing calls the China-Europe freight train service (from eastern China to Duisburg in Germany and also Madrid); the Kamchiq Tunnel in Uzbekistan; and last but not least the massive China-Central Asia natural gas pipeline system.

No wonder Xi keeps stressing the “inter-connectivity” theme over and over gain, as economic corridors are being built at breakneck speed, and the China Railway Express all the way to Europe – although not yet on high-speed rail – is already a go. www.globalresearch.ca...

It helps when you have $4 trillion in foreign currency reserves and massive surpluses of steel and cement. That’s the sort of thing that allows you to go “nation-building” on a pan-Eurasian scale. Hence, Xi’s idea of creating the kind of infrastructure that could, in the end, connect China to Central Asia, the Middle East, and Western Europe. It’s what the Chinese call “One Belt, One Road”; that is, the junction of the Silk Road Economic Belt and the Twenty-First Century Maritime Silk Road.

And don’t forget about the bonuses that could conceivably follow such developments. After all, in China’s stunningly ambitious plans at least, its Eurasian project will end up covering no less than 65 countries on three continents, potentially affecting 4.4 billion people.

The Silk Road revival started out as a modest idea floated in China’sMinistry of Commerce. The initial goal was nothing more than getting extra “contracts for Chinese construction companies overseas.” How far the country has traveled since then. Starting from zero in 2003, China has ended up building no less than 16,000 kilometers of high-speed rail tracks in these years -- more than the rest of the planet combined.

And that’s just the beginning. Beijing is now negotiating with 30 countries to build another 5,000 kilometers of high-speed rail at a total investment of $157 billion."" www.tomdispatch.com...

Also this coming up here in Northern Ontario Canada
CHINA RAILROAD

Also
Ring of Fire


This is just 120 miles west off where I work at DeBeers Victor Diamond Mine
Few Map

a reply to: Trillium

If you add this project that China seems to be pursuing it would seem they could dominate logistics . www.abovetopsecret.com...

43 countries is a lot of countries to be bankrupt in... I think the financial departments books need a very close examination as does the competence of the staff doing them and possibly setting the rates. Doubtful they were just aiming them very low otherwise competition would have already jumped the slack...

if competition has already adjusted then the countries left short are going to eat a lot of loss... while the workers depending on it to eat are left scrambling to shore up something else.

A competitor will not buy them out as that will assume the debt... they will however buy out all the assets in forfeiture which are usually sold just to cover the bankruptcy fees to clear the owners from further responsibility to the losses incurred.

a reply to: Caver78

It doesn't really matter if it is simply "Christmas Merchandise", if the hold up of the merchandise persists, it does not only affect the individual who is shopping for those items during the Holidays... It will affect the companies who are pulling in the product and a whole gamut of companies involved in the process of keeping that company in operation, it could have a ripple effect if not resolved. Even a temporary setback of this nature can have a huge impact. It can create a mess at the ports which in turn would cause delays for other ship lines/container arrivals.

This could be something of a smaller proportion that causes a trigger affect toward the downfall of an already crippled economy.

The news does seem to be strangely quiet about it. Are they trying to keep it on the down low ? Or is it just breaking and so new that they aren't really reporting the impacts yet.

Keeping a watch...

leolady

originally posted by: slider1982

This type of thing a few years ago was unheard of but now is common place..

RA

It's called GREED

Here's a good article:

Essentially, the global supply of ships has been growing much faster than the amount of goods that need to be shipped. According to a Moody’s analysis published in June, global container-ship capacity grew by 8.6 percent in 2015, a year when global trade grew by only 2.6 percent.

There is a glut of availability in shipping and as a result long term there won't be much difference noticed at the consumer level.

As for the shipping industry’s woes, the obvious solution would be to just scrap a large amount of capacity, giving more business to the dystopian ship-breaking yards on the coast of Bangladesh. Scrapping is increasing, but companies are still reluctant to do this, since iron ore prices are also low due to China’s slump. It’s cheaper to let the ships float rather than melt them down, so at the moment many companies are simply having them do nothing. A record 352 500+-TEU ships are currently sitting idle around the world. An estimated 25 percent of the world’s container capacity sit empty.

Why the global network of cargo ships is suddenly melting down.

Short term there will be some legal hurdles which will need to be overcome to arrange for movement of the product which is currently in transition, but that won't affect things too much at the consumer level for some time; or so it would seem.

How could a company collapse like that..obviously not the price of bunker crude?

a reply to: vonclod

Too much capacity, not enough product. Rates dropped and they had too many expenses.

a reply to: jadedANDcynical

You would think but shipping rates are already jumping.

originally posted by: Zaphod58
a reply to: vonclod

Too much capacity, not enough product. Rates dropped and they had too many expenses.

Doesn't too much capacity necessitate market corrections like this?

Does it necessarily mean prices for everything will go up?
Seems like things would remain about the same....maybe a short spike while things sort themselves out.

Is that the only carrier in S. Korea?

a reply to: DontTreadOnMe

They have several shipping companies, from containers to oil.

Hopefully this is just a small correction, but we may see more go the same route if they aren't careful.

Here's an update of sorts....not sure how much progress it shows, but nonetheless:

The Hanjin Greece, one of roughly a dozen of the company’s ships destined for the U.S. West Coast, docked in Long Beach on Saturday after a U.S. bankruptcy court granted it protection and terminal operators agreed to take it.

Workers started unloading the Greece over the weekend, and on Monday trucks began moving the containers for distribution to retailers who are waiting for goods ahead of the busy holiday shopping season, said Teamsters spokeswoman Barbara Maynard.

[snip]

The unloading of the Hanjin Greece marked a step forward in clearing the bottleneck of clothing, furniture and other cargo meant for store shelves. But the ship carries only a fraction of the billions in goods on dozens of ships owned or leased by the world’s seventh-largest container carrier.

gcaptain.com...
www.businessinsider.com...

a reply to: jadedANDcynical

This is likely due to despite the cost of a ship which is enormous BTW that it would turn a profit in under a year of operation... that's at least how it used to be less than 10 years ago. Flooding the ocean with competing shipping vessels or a lot of them to pay off incurs a huge amount of overhead debt... I am sure we will see more of the same with an excess of these ships that cannot be paid off in the near future.

originally posted by: Caver78
a reply to: Zaphod58

WOW!

Far as I know this is unprecedented, did a little more reading and it seems there is a glut of shipping companies & underutilized shipping capacity?

That's true. It's called the Baltic Dry index. The industrial economy slowed down (heavy duty equipment for oil exploration, mining and drilling). Then when millions of containers remain unused, dozens of ships and thousands of crew remain unused.

Probably someone will buy up this company or at least the profitable bits like the ships with cargo.

The chairman of Hanjin Group transferred 40 billion won ($36 million) to Hanjin Shipping (117930.KS) on Tuesday to help unload cargo stranded on the troubled shipper's vessels, a spokesman said, but regulators warned securing further funds could take "considerable time".

The parent of Hanjin Shipping pledged last week to raise 100 billion won to help rescue cargo in the wake of the collapse of the world's seventh-biggest container shipper, including the 40 billion won from Chairman Cho Yang-ho.

About $9 million pledged by Choi Eun-young, a former chairwoman of Hanjin Shipping, has also come in, the shipper said.
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inRead invented by Teads

Around $14 billion of cargo has been tied up globally as ports, tugboat operators and cargo handling firms worried about not being paid refused to work for Hanjin, which filed for receivership in a Seoul court early this month.

www.reuters.com...

a reply to: roadgravel

Sounds like a job any ex naval military around the world would enjoy that receives a pension or retirement that have a passion for ships would like to do as whether they get paid or not won't really matter already receiving income but if they do get paid... it could be a win win for all of those involved in adverting the danger to world economies as a service just in the private sector.

Trying to see some workable solutions and what to avoid in the future helps... all the empty ships could be sold to others looking to buy them so the company could downsize and use those un-needed assets to float rather than sink.