Hanjin bankruptcy 'unknown territory', good for the long term

Hanjin Shipping not surprisingly dominated discussions on the container panel at Marine Money Asia.

“It’s a huge shock to the industry,” commented Orient Overseas Container Line (OOCL) deputy cfo Michael Fitzgerald.

“We are into totally unknown territory – this has never happened before on this scale.

“Half of the ships were not Hanjin’s and half of the boxes were not Hanjin’s, this going to take a very long time to sort out. But in the medium to long term its probably positive for the industry.”

Soeren Andersen, ceo of containership owner Rickmers Maritime, echoed that it could be positive in the long term describing the whole industry as currently being in “the hot seat”.

The bankruptcy of Hanjin came as surprise as most had expected some sort last minute rescue by the Korean government and indeed Wan Hai vice chairman Randy Chen said it was a “situation that could possibly have been avoided”, noting smaller fellow Korean line Hyundai Merchant Marine had been rescued.

By not being rescued there is short term pain but it also changes the norms people think by in the industry.

While the news that Hanjin will be returning all its 65 chartered ships has raised concerns that capacity will not be reduced panel members thought it would be difficult to charter many of the vessels in the near term.

Chen brought up the issue that happened after the OW Bunker bankruptcy where bunkers on the ship did not actually belong shipowner due to the fact it was bought on credit therefore making it liable to arrest. “We’ve instructed our chartering department not to touch Hanjin vessels,” he stated.

OOCL’s Fitzgerald meanwhile noted, “Unfortunately for owners there are a lot of idle vessels. There are not a lot of people on the liner side looking for ships.”

He added many vessels would stay idle and some would be scrapped.