Wednesday, December 2, 2009

Hanjin Shipping Expect A Change Of Fortune For Container Shipping Business

Divide and Conquer Policy Proceeds as Planned
Shipping News Feature

SOUTH KOREA - After their recently announced policy of rate restoration effective from this month on both Trans Atlantic and Trans Pacific routes Hanjin Shipping Line Chairwoman Eun Young Choi has expressed her confidence in the future of the container shipping industry during a statement made today at the launch of Hanjin Shipping Holdings, a vehicle announced in September, which will concentrate on managing subsidiary companies belonging to the group. This adjustment is planned to leave Hanjin Shipping free to manage purely shipping matters.

The move by Hanjin is in line with their expressed intention to minimise losses by way of a policy of rate maintenance in a troubled and competitive market, coupled with a ruthless drive to reduce overheads to a bare minimum. In the race to survive the current down turn all the major carriers are avowing the same policy. As part of the Trans Pacific Stabilization (TSA) agreement Hanjin, as reported here in October, seem determined to see both reductions in services and cooperation with other lines over rates, as essential in surviving the economic relapse.

Ms Eun Young Choi did not elaborate further on any immediate plans as to the methods she intends to implement with regard to loss reduction but the splitting of responsibilities seems sensible at a time when companies really need to focus on individual core activities. Changes wrought by the new holding company will be separate from Hanjin Shipping’s drive to maintain and increase revenue levels.

Historically shipping lines do not have a good record of standing by agreements made with competitors over freight rates, this current situation may well prove to be a case of who blinks first. Hanjin will be hoping that other container shipping groups will follow similar policies to those they have apparently decided upon.

Pic :- Afrank99