Dive Brief:
- A South Korean bankruptcy court ordered Hanjin to return all chartered ships to owners and sell as many of the ships the company owns after the vessels complete their cargo trips, according to various news outlets.
- Hanjin is working to restructure into a regional shipping line, aiming to keep a maximum of 15 of the 37 ships it currently owns, according to the Wall Street Journal. Reuters reports chartered vessels increase Hanjin's fleet size to nearly 100 container ships.
- Delays in unloading cargo are costing the company over $2 million in daily charter fees, Reuters reports, and previous government statements indicating South Korea would not bail Hanjin out have left the company to devise its own path forward.
Dive Insight:
As companies wring their hands awaiting resolution for their stranded cargo, the South Korean government is pushing the company to quickly downsize and provide cash to avoid further financial liabilities.
Billions of dollars in cargo remain stranded aboard Hanjin ships, and the elimination of further debt-by-charter and sale of available ships will progressively, if slowly, help release what remains stranded. In addition, South Korean creditors are looking to inject more cash to end the crisis once and for all, allowing stakeholders to focus on restructuring the company into a regional, more financially stable carrier.
The end result may not be bad for the company, it seems. Supply Chain Dive previously reported the Hanjin crisis put a much needed spotlight on a general shipping overcapacity, and as a regional carrier Hanjin will be able to focus on Asian trade lanes, which were long its dominant suit. However, the Hanjin name is already soiled for many in the shipping world and even if the company survives the crisis, it will long be an uphill battle for what was once the world's 7th largest shipper.
