The biggest South Korean container shipping line, Hanjin Shipping
, decided this Wednesday to file for bankruptcy protection after its creditors closed the door to the possibility of a financial assistance plan. This could be the biggest fall in the history of maritime industr
y since the United States Lines case in 1986.
The announcement was made just after Hanjin’s main creditor; Korea Development Bank (HKD) rejected the shipping line
s proposition in order to reduce its debts.
Meanwhile, the second biggest container shipping line in the country, Hyundai Merchant Marine
, indicated that Korea’s government wants them to buy some assets from its rival company, including vessels and crew.
The global trade crisis
has severely affected maritime sector and Hanjin had a very difficult first semester with losses of 473,000 Million Won or 381 Million Euros.
Additionally, China, USA, and Spain ports had blocked access to Hanjin vessels
because of concerns that they wouldnt be able to pay fees, according to a Hanjin representative.
“It means one less competitor but it really won’t change the fundamental problem the industry is facing,” said Park Moo Hyun, an analyst at Hana Financial Investment Co. in Seoul. “There will still be the same number of ships. What we really need is a way to cut down on capacity.”
Hanjin Shipping is part of Hanjin Group, which is also the owner of Korean Air Lines Co
. the third cargo airline in the world. In 2014 Korean Air Lines became the main shareholder
with 33% of the shares, but this time, the help has been discarded.
The decision of Hanjin’s future is now in the hands of Seul Central District Court. The process could take a couple of months according to Reuters
Hanjin is part of The Alliance
, a group of shipping lines formed in May to compete with the alliance between Maersk Line and Mediterranean Shipping Co.
also known as 2M.