Final Demise of World’s Seventh Largest Container Shipping Line Today

SOUTH KOREA – WORLDWIDE – Today the final bubbles will rise from the wreck of the Hanjin Shipping Company after the Court finalised plans for the liquidation of the container line, formed forty years ago and which thereafter rose to achieve the rank of the seventh largest of the world’s box carrying corporations. The Seoul Court has undertaken to declare the group bankrupt after stating its case for doing so on February 9.

The demise of Hanjin was inevitable in hindsight given the enormous debts which the company had incurred, coupled with the parlous state of the container industry where the development of ever larger vessels has resulted in chronic overcapacity in many trade lanes. Whilst local rival Hyundai Merchant Marine (HMM) has been endeavouring to suck up the fallen company’s best contracts, industry sources indicate that Mediterranean Shipping Company (MSC) seems to have become a favourite with major customers such as Walmart.

Today’s Court ruling follows a two week period to give creditors time to appeal and there will be a first meeting of creditors on June 1 and claims against the estate must be in by May 1, all under the eye of appointed trustee Kim Jin-han  of the DR and AJU law group. The writing was on the wall in December 2016 when a Court filing from receivership accountants PWC stated there was less future in the company trying to continue as a going concern. Meanwhile HMM, which has taken Hyundai’s place as top national carrier, has employed a couple of hundred staff from the failed outfit and taken selected bits and pieces of the global network. HMM however has troubles of its own and is overextended, with its sixth consecutive annual loss likely to be reported this year.

According to industry site VesselsValue the current value of the remnants of the Hanjin fleet has fallen to $986 million for the 42 vessels under its control from the $3.77 billion valuation on its 104 ships owned in 2014. VesselsValue says much of the recent sales activity has been down to financiers selling off the vessels which were leased to Hanjin with just nine vessels currently for sale (7 bulkers and 2 box ships) with the balance now likely to be disposed of shortly.

Of the vessels already sold the two biggest buyers by number of ships appear to be the Korea Marine Transport Company (KTMC) and charter group the Seaspan Corporation, each of which has bought 4 vessels for a combined total of $44 million, whereas HSH Nordbank is listed as having actually bought only one vessel, the purchase price is listed as $74 million whilst in December the German financial outfit passed control of nine charter vessels to the members of the 2M Alliance, six to Maersk and the remaining three to MSC.