Former type Shipping Founded 16 May 1977 | Native name 한진해운 | |
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Defunct February 17, 2017 (2017-02-17) Key people Cho Yang Ho (Chairman & Co-Chief Executive Officer), Suk Tai Soo (Co-Chief Executive Officer, Director) Products Shipping, ocean freight Stock price 117930 (KRX) ₩ 12 -26.00 (-68.42%)6 Mar, 3:30 PM GMT+9 - Disclaimer Subsidiaries Hanjin Pacific Corporation | ||
Hanjin shipping co ltd
Hanjin Shipping Co. Ltd is a bankrupt South Korean integrated logistics and container transport company. Prior to its financial demise, Hanjin Shipping was South Korea's largest container line and one of the world's top ten container carriers in terms of capacity.
Contents
- Hanjin shipping co ltd
- Prelude to bankruptcy
- 2016 financial collapse and subsequent liquidation
- Aftermath and legacy
- Services
- References
Hanjin shipping formerly operated some 60 liner and tramper services around the globe transporting over 100 million tons of cargo annually. Its fleet consisted of many container ships, bulk and LNG carriers. Hanjin Shipping had its own subsidiaries dedicated to ocean transportation and terminal operation and it had several branch offices in various countries.
On February 17, 2017, Hanjin Shipping Co. was declared bankrupt by South Korean courts.
Prelude to bankruptcy
The financial struggles of Hanjin Shipping were attributable to an ongoing downturn in the container shipping industry that is the result of numerous interrelated factors such as weak global GDP, overcapacity on container vessels, "bloated" US retail inventories, changing consumer spending patterns, Chinese economic slowdown, and muted growth in demand for container shipping. The downturn has dented profits and crippled the financial health for the majority of the top twenty ocean carriers.
2016 financial collapse and subsequent liquidation
In April 2016, Hanjin applied to its creditors for debt restructuring, in order to avoid formal insolvency proceedings. On August 31, 2016, Hanjin filed for receivership at the Seoul Central District Court and requested the court to freeze its assets, after losing support from its banks the previous day. After news of Hanjin's breakdown was publicized, creditors initiated a wave of asset confiscation and Hanjin vessels experienced access issues to ports globally because service providers were not informed if and how they would be paid to load and unload Hanjin vessels .
On September 2 Hanjin Shipping Co. filed papers in U.S. Bankruptcy court in Newark, New Jersey that would allow its vessels to dock without its ships, cargo or equipment being confiscated by creditors.
Bogged down with tremendous debt, trapped in a struggling industry unlikely to improve in the near future, and with assets confiscated by creditors or abandoned by the company, signs quickly began to appear that Hanjin would likely be dissolved by the South Korean government and stakeholders. In a matter of weeks after its receivership Hanjin's global presence and dominance in it's industry withered away. The company announced plans to shut down offices around the world, lay-off workers, sell remaining assets, and dismantle its service network. Other container lines distanced themselves from Hanjin and joint operations with the company were terminated.
On February 17, 2017, Hanjin Shipping Co. was declared bankrupt by South Korean courts, with a court order to be liquidated.
Aftermath and legacy
Hanjin Shipping's dissolution was the largest and most significant bankruptcy in the container transport industry and it caused worldwide disruption in shipping as cargo ships were left stuck at ports and canals waiting for cash payments. Hanjin's bankruptcy created a massive ripple effect. Other businesses that rely on physical products found themselves without the expected revenue from inventory that became stuck at sea. Hanjin's abrupt cave-in occurred at an especially inconvenient time for retailers furnishing their inventories with imported items in preparation for a seasonal uptick in Thanksgiving, Christmas, Black Friday, and New Years sales. Although large companies such as Nike were affected, the repercussions were more prominent on smaller companies..