Hanjin Shipping Company originates in South Korea but is internationally recognized in the maritime industry. Responsible for a substantial portion of the industry’s shipping needs, Hanjin is the world’s seventh-largest container shipper. The company is now facing a detrimental dilemma: too many ships and not enough cargo. In order to protect its remaining assets, the company filed for bankruptcy in the United States. So far, eight of Hanjin’s ships have been seized. Approximately 80 more are awaiting their fate and are, in the meantime, preventing approximately $14 billion worth of cargo orders from being delivered. On September 9, 2016, a U.S. judge granted an order allowing Hanjin provisional protection from U.S. creditors, thus enabling some of its vessels to dock and unload.
Despite the court ordered protection, the company’s collapse has already made waves across the board. Retailers are predicting delayed shipments in advance of the holiday season, the impact of which will be felt by the consumer. U.S. exporters are estimating a 50% increase in shipping fees as a direct result of Hanjin’s bankruptcy. Additionally, commentators are noting that the bankruptcy is reflective of an industry-wide problem, citing Maersk Line’s $114 million loss in the first six months of 2016. Though the fate of the company and its vessels is uncertain, we can be sure that all members of the industry will feel the impact, either directly or indirectly.