HANJIN, what’s next?

LecturerMax Galarza

Grade8/10

Group Members: Christian Salgado Josselyn Vargas Carolina Jarrin Melissa Vera Carlos Narváez

About Hanjin

Hanjin Shipping is Korea's largest and one of the world’s top ten container carriers.

Transport over 100 million tons of cargo annually.

With 4 regional headquarters in the U.S., Europe, Asia and South East & West Asia.

Hanjin Shipping’s world-class logistics network around the world. 

In 5 of september of 2016, Stocks of Hanjin Shipping reported a fall of 13.7% in the Price.

Affected by the financial problems it faces and that led it to declare bankruptcy.

Hanjin vessels have been arrested and ports are refusing to work Hanjin ships for fear they will not be compensated.

The largest container shipping bankruptcy in history and the consequences will continue to reverberate throughout international supply chains and the transportation sector.

Its debt totalled $5.5bn. Hanjin’s banks decided to end financial support for the shipper. he collapse comes at a time of high seasonal demand for the

shipping industry ahead of the year-end holidays.  Hanjin represents nearly 8% of the trans-Pacific trade volume for

the US market. the bankruptcy was having “a ripple effect throughout the global

supply chain” that could cause significant harm to both consumers and the US economy, the association wrote.

Impact on the economy of South Korea exports

The suspension of payment of the shipping South Korean Hanjin Shipping, prices will skyrocket of container shipments that have been reduced transport capacity, as has predicted today the director of enterprise quality of Catalan shipping iContainers, Anna Mateu.

Hanjin, which operates in the ports of Barcelona, Valencia and Algeciras, filed bankruptcy to justice Seoul following the refusal of the creditor banks to refinance their debts, increasing about 4,500 million euros at the end of 2015.

• Economic impact to shareholders Hanjin Shipping Company

Meanwhile, Korean Air Lines, the parent company of Hanjin Group, lost today in stock Exchange the 2 percent on fears that forced to inject liquidity into the shipping.

Hanjin's creditors, led by Korea Development Bank (KDB) announced last week that it would not provide more funds to the shipping indebted insufficient considering the proposed plan to improve the finances.Hyundai Merchant Marine, which also experiencing economic difficulties and is in the process of restructuring, would also be interested in acquiring some of the assets of Hanjin, as its port terminals and global transport routes, according to South Korean media collected.

Encouragement and support from the Government of South KoreaHowever, after learning that the government of South Korea will extend financial support to contractors of the company, totaling 457 to Hanjin owed a total of 64,000 billion won (about 52 million euros at current exchange rates), the shares of the company closed with a decrease of 13.71%.

Among the measures included in the Government is replacing Hanjin Shipping vessels by other shipping Korean ships to ensure the entry and exit of goods from China.The shipping branch of Hyundai will provide 13 of its container ships for this purpose to routes operated by Hanjin, according to South Korean minister.

Advantages for competitors Competitors will have more costumers.

Specially in high season. Increase freight and routes. Debt would not increase. Raise on freight from other ways of

transportation.

Effects with Clients Merchandise may rotten on the boats that may not

enter the ports. The clients forecast to receive merchandise on a

certain time, mainly for seasonal businesses or orders. Clients will lose their trust towards the company. Higher costs by 50% in comparisons to previous

freights.

Effects with clients Security to the merchandise of other clients and the

crews. Stocks lose value, investors lose money.   The clients acquire debt and hope to recover the

investment with the merchandise. Cargos may be seized.  98 container ships had been denied access to ports

including Shanghai, Sydney, Hamburg, and Long Beach, California.

Other facts. Hanjin accounts for 7.8% of trans-Pacific trade volume for the

U.S. market and a Hanjin bankruptcy would be the largest ever for a container shipper.

50 containers with components for a nuclear power plant under construction in the United Arab Emirates by a consortium led by Korea Electric Power Corp (KEPCO) are parked on the outskirts of the port of Singapore.

Maersk will offer 9 routes that used to offered Hanjin.

IMPACT IN LATINAMERICAPanama canal

• Hanjin Shipping represent 1.2% of

transits through the Canal, and 2.7% of

revenue received by the ACP toll.

Big lawsuits from companies like Samsung, LG Electronics and Nexen

Tire Corporation.

Many users of the shipping company will

have to seek other services to send or

receive merchandise.

Retailers will turn more towards to products

manufactured closer to home – in the U.S. and

Mexico.

Bibliography

Panamá analiza el impacto de la quiebra la naviera Hanjin Shipping. (n.d.). Retrieved October 28, 2016, from http://www.estrategiaynegocios.net/lasclavesdeldia/996673-330/panamá-analiza-el-impacto-de-la-quiebra-la-naviera-hanjin-shipping

McGrath, B. (n.d.). South Korea’s Hanjin Shipping bankruptcy has global impact - World Socialist Web Site. Retrieved October 28, 2016, from https://www.wsws.org/en/articles/2016/09/09/hanj-s09.html

CNBC. CNBC . s.f. http://www.cnbc.com/2016/08/31/hanjin-shipping-vessel-unable-to-dock-at-south-korea-port-yonhap.html (last access: 27 de OCTOBER de 2016).

Bibliography

FORTUNE. FORTUNE . s.f. http://fortune.com/2016/09/02/hanjin-shipping-ports-us-firms/ (Last access: 27 OCTOBER of 2016).

. FORTUNE. s.f. http://fortune.com/2016/09/05/hanjin-shipping-ships/ (last Access : 27 OCTOBER of 2016).

INSIGHTS, OECD. OECD INSIGHTS. s.f. https://oecdinsights.org/2016/09/09/container-shipping-why-hanjin-went-under/ (last Access : 27 OCTOBER of 2016).

TIMES, FINANCIAL. FINANCIAL TIMES . s.f. https://www.ft.com/content/205af87a-6fba-11e6-a0c9-1365ce54b926 (last access: 27 OCTOBER of 2016).

Bibliography

The guardian (2016), Hanjin Shipping bankruptcy causes turmoil in global sea freight, retrived from: https://www.theguardian.com/business/2016/sep/02/hanjin-shipping-bankruptcy-causes-turmoil-in-global-sea-freight

Financial times (2016), Debt-laden Hanjin Shipping seeks court protection,Retrived from: https://www.ft.com/content/93dcd36e-6f4b-11e6-a0c9-1365ce54b926