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UPDATES Hanjin Bankruptcy
 
UPDATE HANJIN BANKRUPTCY
 
The news about the Hanjin bankruptcy continues to flood the business sources. Since their parent company also owns Korean Airlines, there is some question as to the negative impact to their air cargo industry, as well.

The only thing for certain is that we are seeing some upward modal shifting, as some shippers are upgrading their transpacific eastbound cargo to air from ocean in order not to get caught in the mess at sea. Hanjin ships are being either seized in port for salvage value, or being denied berthing by most ports altogether, to prevent failure to pay docking fees.

The thinking is that since ocean cargo rates have skyrocketed, the difference between ocean and airfreight pricing has shrunk significantly, so why not use airfreight for some of their cargo.

Secondly, and it’s important to consider, in the containerized steamship industry, ALLIANCES are common. This means that, like airlines that do code-sharing of each other’s aircraft on specific flights, the steamship companies make an agreement to actually put their cargo onto each other’s ships to avoid the costs of a sailing on that date. Essentially, they agree to “use your ship on Monday for both of our customers’ containers, and we’ll use our ship on Tuesday” and so on. The alliance that Hanjin is in is called THE ALLIANCE, and other members are Mitsui OSK Lines, NYK Line, and “K” Line. This alliance competes with other alliances (steamship company groups) that do the same ship-sharing practice.

Although RSE has done its utmost not to tender any cargo to Hanjin during their death spiral, our research has shown that perhaps 1 or 2 containers may have been tendered to Hanjin ships by members of THE ALLIANCE, as noted by the master bills of lading, which we receive after fact.

We will continue to update you as news becomes available
.
For any concern call us and ask our expert Chris Liberty
650-204-6010
or
chris.liberty@rsexpress.com
 
RS Express is a professional cargo management company, providing international transportation, customs clearance, and warehousing services throughout the world, in addition to the management of information that underlies each segment as backbone.  Visit us at:  rsexpress.com