Tuesday, June 1, 2010

Korean Shipping Line Uses Revised Container Rates - And Other Devices

Hanjin Strive for Profitability on All Fronts
Shipping News Feature

SOUTH KOREA - No one could accuse Hanjin Shipping, the country’s largest container shipping line, of sitting on their hands after the record losses they incurred which we reported in February. Last month it was apparent that the company was improving its position (in both container and bulk freight sectors), evidenced by its steady stock price rise, even more impressive considering the fall of some other stocks on the Korea Composite Stock Price Index (KOSPI), and intending to introduce further measures to stimulate growth.

Now it seems that the Transpacific Stabilization Agreement rate rises, proposed in October for implementation this month, are holding up, with virtually all corporate shippers accepting the inevitability of higher tariffs per TEU. Hanjin say it has signed agreements for around 90% of its regional contracts and nobody in the container trade seems to be seeking another price war.

Hanjin also revealed recently they were selling off 49% of the Hanjin New Port Co. which runs dock facilities in Busan, to raise around $180 million to ameliorate their debt situation plus issuing a $200 million new stock offer (10.9 million shares). Success for the company will depend largely on a US led recovery however and all the Transpacific lines continuing to hold their nerve in the coming months.