When Hanjin Shipping, Korea's largest and one of the world’s top ten container carriers, filed filed for court receivership after losing the support of its banks, its assets left frozen as ports from China to Spain denied access to its vessels.
The long-term fallout from Hanjin collapse will have far-reaching effects, but the impact is already being felt in ports around the world.
Shipping is one of the sectors in which South Korea is a global leader, so what does this recent collapse tell us about world trade?
The collapse of Hanjin Shipping sent ripples though global trade on Thursday, as the country's largest port turned away its ships and as some manufacturers scrambled for freight alternatives, says a report in the Reuters.
WSJ reports that up and down the West Coast, freight businesses were scrambling Wednesday in the wake of news that Hanjin Shipping's filing or receivership.
As port terminals from Long Beach, Calif., to Seattle turned away outbound containers destined for Hanjin ships, cargo businesses were rushing to rebook shipments on other ocean carriers. That involves the extra work of shuttling the cargo on trucks, then unloading and repacking it into the new carriers’ containers.
A number of vessels have been halted outside of port entrances, either by creditors who are attempting to recover unpaid charter fees or by their operator.
An official with Hanjin Shipping in Busan confirmed that its vessels were not entering the southern city's port as container lashing providers deny service on concerns that they will not be paid. The company was also worried that the ships may be seized by creditors.
South Korea's LG Electronics Inc said
on Thursday it is cancelling orders with Hanjin Shipping Co Ltd and seeking alternatives after the troubled container shipper filed for court receivership.
Korean Air Lines Co. estimated losses on its investments in Hanjin at more than a third of projected operating income for this year. Losses on loans and an equity stake in the container shipping line will be as much as 383.3 billion won ($344 million), Korean Air Lines said.
Hanjin Shipping operates some 70 liner and tramper services around
the globe transporting over 100 million tons of cargo annually. Its fleet consists of some 150 containerships and bulk carriers.