In April 2016, Hanjin applied to its creditors for debt restructuring, in an attempt to avoid formal bankruptcy proceedings. However on August 31, 2016, Hanjin was forced to file for bankruptcy protection at the Seoul Central District Court and requested the court to freeze its assets. The company had lost the support of its banks the previous day. Hanjin was the world’s 8th largest shipping company, an organization which controlled close to 100 container ships and around $10 bn worth of revenue per year. Its collapse is the biggest ever seen by the industry. The root cause of the problem however has overshadowed the industry since the financial crisis of 2009. Overcapacity in the system caused by ambitious companies ordering new ships that were too big and in too large a number has meant that the entire industry has suffered from poor prices and assets that are too expensive to maintain.
Scope
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Reasons to buy
What happened to hanjin?
What is happening in the global shipping industry?
Could this disaster happen to other companies?
Companies mentioned
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Table of Contents
Overview
Catalyst
Summary
Hanjin Files for Bankruptcy
Hanjin was one of the world’s largest shipping companies
Hanjin’s problems started 2011, culminating in bankruptcy
Competitors move ...
Overview
Catalyst
Summary
Hanjin Files for Bankruptcy
Hanjin was one of the world’s largest shipping companies
Hanjin’s problems started 2011, culminating in bankruptcy
Competitors move in for the kill
South Korean government hoped Hyundai would take over
2M the winners, but Cosco, K-Line and Evergreen Marine profit
The biggest shippers are now consolidating in response
The Shipping industry and bankruptcy
Overcapacity in the industry partially caused Hanjin’s demise
Bigger ships mean bigger ports and more investment
Port congestion from consolidation and supercarriers
Consolidation will continue for some time to come
Shipping industry, what happens next
Companies have already tried everything to survive
Overcapacity will continue and we will see more bankruptcy
Almost any shipping company could be struck next
Industry is polarized and financial backers are leaving
Conclusions
The Hanjin problem will take subsidiary companies with it
Hanjin’s calamity has been a long time coming
Overcapacity is the problem which will take more companies
Hanjin crisis, customers are starting to choose more carefully
Appendix
Sources
Further Reading
Ask the analyst
About MarketLine
Disclaimer
List of Tables
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List of Figures
Figure 1: Pre-Bankruptcy order of largest global shipping groups
Figure 2: Change in market share October to November 2016 Asia-North America line
Figure 3: Marketshare ...
Figure 1: Pre-Bankruptcy order of largest global shipping groups
Figure 2: Change in market share October to November 2016 Asia-North America line
Figure 3: Marketshare % of Hanjin’s competitors November 2016 North America-Asia Line
Figure 4: Comparison of the Largest ship classes