AuthorTopic: Official Shipping Collapse Thread  (Read 13396 times)

Offline MKing

  • Contrarian
  • Sous Chef
  • *
  • Posts: 3354
    • View Profile
Re: Official Shipping Collapse Thread
« Reply #30 on: March 15, 2016, 02:51:14 PM »
It seems that as the Chinese slowdown ripples through the market, this is a predictable consequence. Just knowing what happened during 2008 would indicate that this is a predictable consequence. No different than companies laying down rigs as commodity prices can't sustain a given level of activity, so people specializing in transport lay down rigs like a trucker might park his tractor.

Any country dependent on selling commodity surpluses, like Australia, will be more effected than a country with a higher percentage of customers being within its own borders, like the US.

It would be nice if people would understand this correlation, rather than turning every new number on a relative trading index (like the BDI) into some omnipotent indicator of DOOM. But for some reason the BDI is a favorite.

Sometimes one creates a dynamic impression by saying something, and sometimes one creates as significant an impression by remaining silent.
-Dalai Lama

Offline azozeo

  • Sous Chef
  • ****
  • Posts: 6246
    • View Profile
Re: Official Shipping Collapse Thread
« Reply #31 on: March 16, 2016, 03:37:54 AM »
It seems that as the Chinese slowdown ripples through the market, this is a predictable consequence. Just knowing what happened during 2008 would indicate that this is a predictable consequence. No different than companies laying down rigs as commodity prices can't sustain a given level of activity, so people specializing in transport lay down rigs like a trucker might park his tractor.

Any country dependent on selling commodity surpluses, like Australia, will be more effected than a country with a higher percentage of customers being within its own borders, like the US.

It would be nice if people would understand this correlation, rather than turning every new number on a relative trading index (like the BDI) into some omnipotent indicator of DOOM. But for some reason the BDI is a favorite.


Did you click on the marine traffic link ?
There could be many reasons WHY, here.
Insurance companies refusing to cover the event of crossing,
To many incidents with rogue waves currently, Ask the survivors of the Deep Horizon (if they'll talk) what really occurred....
The underwater activity with millions (yes, millions) of undersea volcanoes popping off,

There are minimal vessels in the Pacific right now. A handful more in the Atlantic.
I know exactly what you mean. Let me tell you why you’re here. You’re here because you know something. What you know you can’t explain, but you feel it. You’ve felt it your entire life, that there’s something wrong with the world.
You don’t know what it is but its there, like a splinter in your mind

Online RE

  • Administrator
  • Chief Cook & Bottlewasher
  • *****
  • Posts: 32710
    • View Profile
Re: Official Shipping Collapse Thread
« Reply #32 on: March 16, 2016, 03:57:46 AM »
Did you click on the marine traffic link ?

Even if he did spend some of his endless online hours to click on such a link, unless it meets his delusional cornucopian belief system, he wouldn't buy it.  He lives in a world of fantasy, and since he lacks the talent to run his own blog, he tries to sell his fantasy here on the Diner on my fucking blog.  Which is a wicked losing proposition, since none of the Admins buy his spin at all and NOBODY including those who occasionally fall for his bullshit can stomach his snark and self-puffery find palatable more often than not, and so ends up getting DNFed anyhow!  lol.

Much like Guy McPherson, he has a scientific background and training, but he is fundamentally an ideologue.  There really is not much difference between Guy and Moriarty.  They both resort to Ad Hom argument when challenged, and neither one puts forth any of their own material to validate their claims.  Bullshit Artist Ideologues, in a nutshell.

RE
SAVE AS MANY AS YOU CAN

Offline azozeo

  • Sous Chef
  • ****
  • Posts: 6246
    • View Profile
Re: Official Shipping Collapse Thread
« Reply #33 on: March 16, 2016, 04:38:53 AM »
Did you click on the marine traffic link ?

Even if he did spend some of his endless online hours to click on such a link, unless it meets his delusional cornucopian belief system, he wouldn't buy it.  He lives in a world of fantasy, and since he lacks the talent to run his own blog, he tries to sell his fantasy here on the Diner on my fucking blog.  Which is a wicked losing proposition, since none of the Admins buy his spin at all and NOBODY including those who occasionally fall for his bullshit can stomach his snark and self-puffery find palatable more often than not, and so ends up getting DNFed anyhow!  lol.

Much like Guy McPherson, he has a scientific background and training, but he is fundamentally an ideologue.  There really is not much difference between Guy and Moriarty.  They both resort to Ad Hom argument when challenged, and neither one puts forth any of their own material to validate their claims.  Bullshit Artist Ideologues, in a nutshell.

RE


Well said, Bravo !
Some journal time on the old cognitive dissonance trail may be in order here.
In the recovery movement we are suppose to send blessings to the still sick ones.


Forward to the 1st edition of the big book..........

If your not a drunk then replace the word alcohol with your name i.e. "Moriarty"

Foreward To First Edition
*Tenth Printing, August, 1946

      We, of Alcoholics Anonymous, are many thousands of men and women who have recovered from a seemingly hopeless state of mind and body. To show other alcoholics PRECISELY HOW WE HAVE RECOVERED is the main purpose of this book. For them, we hope these pages will prove so convincing that no furthur aunthentication will be necessary. We think this account of our experiences will help everyone to better understand the alcoholic. Many do not comprehend that the alcoholic is a very sick person. And besides, we are sure that our way of living has its advantages for all.
      It is important that we remain anonymous in order to more effectively handle the overwhelming number of personal appeals which may result from this publication. Being mostly business or professional folk some of us could not carry on our occupations if known. We would like it understood that our alcoholic work is an avocation.
      When writing or speaking publicly about alcoholism, we urge each of our Fellowship to omit his personal name, designating himself instead as "A Member of Alcoholics Anonymous."
      Very earnestly we ask the press also, to observe this request, for otherwise we shall be greatly handicapped.
      We are not an organization in the conventional sence

vii
FOREWARD TO FIRST EDITION

sense of the word. There are no fees nor dues whatsoever. The only requirement for membership is an honest desire to stop drinking. We are not allied with any particular faith, sect or denomination, nor do we oppose anyone. We simply wish to be helpful to those who are afflicted.
      We shall be interested to hear from those who are getting results from this book, particularly from those who have commenced work with other alcoholics. We should like to be helpful to such cases.
      Inquiry by scientific, medical, and religious societies will be welcomed. (The Alcoholic Foundation, Grand Central Annex Post Box 459, New York City (17).)
Alcoholics Anonymous.     

I know exactly what you mean. Let me tell you why you’re here. You’re here because you know something. What you know you can’t explain, but you feel it. You’ve felt it your entire life, that there’s something wrong with the world.
You don’t know what it is but its there, like a splinter in your mind

Online RE

  • Administrator
  • Chief Cook & Bottlewasher
  • *****
  • Posts: 32710
    • View Profile
Re: Official Shipping Collapse Thread
« Reply #34 on: March 16, 2016, 12:15:24 PM »
Did you click on the marine traffic link ?

Even if he did spend some of his endless online hours to click on such a link, unless it meets his delusional cornucopian belief system, he wouldn't buy it.  He lives in a world of fantasy, and since he lacks the talent to run his own blog, he tries to sell his fantasy here on the Diner on my fucking blog.  Which is a wicked losing proposition, since none of the Admins buy his spin at all and NOBODY including those who occasionally fall for his bullshit can stomach his snark and self-puffery find palatable more often than not, and so ends up getting DNFed anyhow!  lol.

Much like Guy McPherson, he has a scientific background and training, but he is fundamentally an ideologue.  There really is not much difference between Guy and Moriarty.  They both resort to Ad Hom argument when challenged, and neither one puts forth any of their own material to validate their claims.  Bullshit Artist Ideologues, in a nutshell.

RE


Well said, Bravo !


RE
SAVE AS MANY AS YOU CAN

Online RE

  • Administrator
  • Chief Cook & Bottlewasher
  • *****
  • Posts: 32710
    • View Profile
Buy a BIG Boat for $1!
« Reply #35 on: April 23, 2016, 03:37:53 AM »
And you thought the prices of sailboats were cheap!  :o

How many Refugees could you fit on one of these? ???  :icon_scratch:

RE

http://www.theguardian.com/business/2016/apr/22/yours-for-1-58429-deadweight-tonne-bulk-carrier-one-previous-owner

Yours for $1: 58,429 deadweight tonne bulk carrier, one previous owner

Goldenport delists from LSE and agrees to fleet sell-off as it faces debts of over £100m, underlining severe headwinds faced by shipping industry


The Eleni D is one of six ships sold off by the striken shipping company, Goldenport. Photograph: marinetraffic.com

Terry Macalister
@TerryMac999

Friday 22 April 2016 14.11 EDT
Last modified on Friday 22 April 2016 18.35 EDT

Goldenport, one of the last shipping companies left on the London Stock Exchange, has delisted from the market and sold off six of its remaining eight vessels for $1 (69p) each.

The giveaway reflects the most dismal shipping conditions in decades, caused by economic slowdown in China combined with an oversupply of vessels due to a building spree during a previous boom.

The Greek owners are looking for buyers for two remaining vessels and are taking Goldenport off the stock market, saying it no longer makes sense to list shares which have dropped from highs of £50 in 2007 to less than 1.5p.

John Dragnis, the chief executive of Goldenport, said the company’s lenders and shareholders had agreed to the fleet sell-off at a time when the company had debts of more than £100m to RBS and other banks. “The value of the vessels is less than the value of the loans due to extreme market conditions.”

He added: “Dry bulk vessels generally have fallen in value by around 60% over the last year partly because of extreme oversupply and partly because of low demand for coal as China moves towards renewable energy to curb [carbon] emissions.”

Dragnis said family and management controlled almost 60% of Goldenport and had suffered along with all other shareholders from the downturn. The Athens-based shipowner declined to predict when market conditions might pick up although he thought it could be between one and three years.
The stories you need to read, in one handy email
Read more

Goldenport would continue as a private company but admitted in a statement to the stock market that its cash reserves had been “drained”. It added: “The prevailing market conditions are probably the worst of the last 30 years with the Baltic Dry Index dropping to historic lows, and average daily hire rates falling below even a vessel’s daily operating expenses.”

The six ships already sold have been transferred to the ownership of small companies owned by the Dragnis family which originally set up Goldenport and brought the company to the stock market.

The announcement of plans to float in 2006, when the shipping markets were riding high on China’s fast-tracked industrialisation programme, boasted of the value to come.
Advertisement

Goldenport was active, it said, in two main segments of the international shipping market, containers and dry bulk “enhancing stability of revenue streams”. It added that there would be “highly predictable cash flows due to long term contractual arrangements with large established charter counterparties”.

The boom before 2005 encouraged shipbuilding – particularly in China – but caused huge overcapacity as the market turned to bust after 2012. All but one of the Goldenport vessels themselves were built in 2010 and 2011.

Richard Fulford-Smith, the founder of the Affinity shipbroking firm and a leading figure in the London maritime scene, said the bulk shipping markets were in “a sad state” and there could be more bankruptcies and exits before any bounce back. Fulford-Smith, 60, added: “I will probably be retired by the time there is any real recovery.”
SAVE AS MANY AS YOU CAN

Offline Palloy

  • Sous Chef
  • ****
  • Posts: 3754
    • View Profile
    • https://palloy.wordpress.com
Re: Official Shipping Collapse Thread
« Reply #36 on: April 23, 2016, 06:34:14 AM »
Quote
And you thought the prices of sailboats were cheap!

Just think of the cost of paint to do the decks, let alone anti-fouling for the bottom.  At $1, the new owner has set themselves up for bankruptcy too.
The State is a body of armed men

Offline JRM

  • Sous Chef
  • ****
  • Posts: 3190
    • View Profile
Re: Official Shipping Collapse Thread
« Reply #37 on: April 23, 2016, 09:32:58 AM »
$1 from just anyone?  I could buy it and sell it for scrap?
My "avatar" graphic is Japanese calligraphy (shodō) forming the word shoshin, meaning "beginner's mind". --  http://en.wikipedia.org/wiki/Shoshin -- It is with shoshin that I am now and always "meeting my breath" for the first time. Try it!

Offline Eddie

  • Administrator
  • Master Chef
  • *****
  • Posts: 14934
    • View Profile
Re: Official Shipping Collapse Thread
« Reply #38 on: April 23, 2016, 11:31:00 AM »
The thing is, that none of us could qualify to even bid on a deal like that. You would have be able to prove that you COULD provide a place to park that vessel, for one thing. You can't just buy a ship and anchor it out somewhere.

It probably will be scrapped. It's probably the breakers who bought it for 69p.
What makes the desert beautiful is that somewhere it hides a well.

Offline JRM

  • Sous Chef
  • ****
  • Posts: 3190
    • View Profile
Re: Official Shipping Collapse Thread
« Reply #39 on: April 23, 2016, 01:04:12 PM »
You would have be able to prove that you COULD provide a place to park that vessel, for one thing. You can't just buy a ship and anchor it out somewhere.

I have no idea what sort of a sale we're talking about, as I've never bought anything big or fancy.  But if I buy a used car from somebody she's not going to ask me to prove I have a place to park it.

I'm just curious about the $1 price and what it means.  It basically seems to mean, "please take this thing away from me, please".

Seems if it was that simple I could find a captain to sail it around a while as we figured out what use to put it to.  But I guess a regular guy like me can't make an offer 'cause they don't let dirty hippies like me into their fancy digs.

My "avatar" graphic is Japanese calligraphy (shodō) forming the word shoshin, meaning "beginner's mind". --  http://en.wikipedia.org/wiki/Shoshin -- It is with shoshin that I am now and always "meeting my breath" for the first time. Try it!

Offline Eddie

  • Administrator
  • Master Chef
  • *****
  • Posts: 14934
    • View Profile
Re: Official Shipping Collapse Thread
« Reply #40 on: April 23, 2016, 02:10:27 PM »
The owner was willing to sell a ship that cost perhaps 40 million dollars to build for a dollar. That's because the meter is always running, and an idle tanker costs the owner something like 25 to 30 thousand dollars a day to keep floating.

Selling an idle tanker for one dollar might save a hundred thousand in a week. A million over a couple of months or so.
What makes the desert beautiful is that somewhere it hides a well.

Online RE

  • Administrator
  • Chief Cook & Bottlewasher
  • *****
  • Posts: 32710
    • View Profile
Korean Air Estimates Hanjin-Related Losses at Up to $344 Million
« Reply #41 on: September 01, 2016, 11:49:04 AM »
Nice example of cascading debt default.

RE


http://www.bloomberg.com/news/articles/2016-08-31/korean-air-estimates-hanjin-related-losses-at-up-to-344-million


Korean Air Estimates Hanjin-Related Losses at Up to $344 Million
Dave McCombs

August 31, 2016 — 3:57 PM AKDT

    Carrier owns 33% of container line that filed for receivership
    Airline also made loans to Hanjin as part of logistics group

Korean Air Lines Co. estimated losses on its investments in Hanjin Shipping Co., which applied for court receivership Wednesday, 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 in a regulatory filing Wednesday. Operating profit for the airline will probably be 1 trillion won this year, according to the average of analyst estimates.

Hanjin Shipping is part of Hanjin Group, which also owns Korean Air Lines, the world’s third-largest cargo airline. Korean Air loaned funds to Hanjin Shipping and bought shares in the container line in 2014 to become the biggest shareholder with 33 percent. The group, which also counts airport services, logistics and mineral water among its businesses, is headed by Chairman Cho Yang Ho.

Korean freight charges surged about 50 percent after the container line filed for court receivership, Korea Economic Daily reported Thursday, citing unidentified shipping industry officials. Freight charges on Hanjin’s main route between Busan and Los Angeles have jumped to about $1,700 per forty-foot equivalent unit from $1,100.

Hanjin is among shipping lines grappling with a slump in global trade since the 2008 financial crisis and the slowest pace of economic growth in China in a quarter century.
The container line had debt of 6.1 trillion won at the end of June, according to its first-half earnings report.
SAVE AS MANY AS YOU CAN

Online RE

  • Administrator
  • Chief Cook & Bottlewasher
  • *****
  • Posts: 32710
    • View Profile
The Shipping Collapse Nightmare BEGINS!
« Reply #42 on: September 01, 2016, 05:29:01 PM »
And Hanjin is only the 7th largest shipping company!  Wait until Maersk goes tits up!

RE

http://www.bbc.com/news/business-37241727

Hanjin ships, cargo and sailors stranded at sea
By Andreas Illmer BBC News

    1 September 2016
    From the section Business

Image copyright Getty Images

With South Korea's biggest shipping company filing for bankruptcy protection, the vessels, sailors and cargo of Hanjin Shipping are stuck in limbo, stranded at sea.

Ports, fearing they will not get paid, refuse to let them dock or unload.

That means the ships are forced to wait for Hanjin, its creditors or partners to find a solution.

It's a case of unprecedented scale, with experts expecting the deadlock to last for weeks, if not months.

"[It is] a major disaster for the shipping companies and for the companies that own the goods in those containers," Greg Knowler, maritime and trade analyst with IHS Markit, told the BBC from Hong Kong.
Peak season

Not only are ships not allowed to unload, containers waiting to be picked up are also being held back by the ports as collateral over unpaid bills.

And even if the ports did allow them in, Hanjing would probably not as the vessels could expect to be immediately repossessed by the firm's creditors.

Beyond the ships and containers, there is of course the cargo within those containers - in many cases part of a tight chain of supply and delivery.

By September, the global shipping industry is already into what is its busiest time of the year ahead of the Christmas season.

"Just imagine, there are some 540,000 containers with cargo caught up at sea," explains Lars Jensen, chief executive of Sea Intelligence Consulting in Copenhagen.


Image caption The cranes are ready but the Christmas merchandise is stuck at sea

That means that a lot of the goods en route to the US are geared at the busy year-end holidays and any disruption will be a major headache for the companies that have entrusted their products into the hauls of the Hanjin freighters.
Who owns what?

Let's break down the somewhat confusing ownership structure at play here.

Hanjin operates partly with its own ships, and partly with vessels it leases from others. So some of the vessels stuck at sea are owned by other companies who now can't get them back and on top of that have to assume they won't get paid for leasing them in the first place.

The containers on board the ships are also not all Hanjin's own. As the company is part of an alliance with five other cargo firms, there will be a mix of containers on each vessel - some belonging to Hanjin, the rest to the other four partners.

And lastly, there are the firms who own the content of the containers, for instance an Asian electronics firm sending its goods to the US market.

Hanjin's bankruptcy is the largest ever to hit the shipping industry so there's no roadmap as to what will happen now, no precedent of comparable scale.
Stuck in ports

There are the containers stuck at ports.


Image caption Countless containers are stuck in ports around the globe

Let's take a container brought from, say, the Philippines to Hong Kong, to then be picked up from there and taken to the US.

Birthing and handling of that cargo at the Hong Kong port costs money. If Hanjin can't pay that, the port will hold on to those containers as collateral until someone will be willing to pay.

A possible solution would be that the companies who own the contents of those containers ask other shipping companies to step in and pick up where Hanjin left off. The cost of this would be immense, and would come on top of anything they had already paid to Hanjin beforehand. Part of it might be covered by insurance but it would still be an extremely costly endeavour.
Stuck at sea

The containers stuck on board the ships are the next problem. While at sea, there is no way to get the cargo off board.

Ships that are only leased by Hanjin could see their actual owner take back control and bring them into a harbour. They would still need to be cleared of their cargo but could then be leased to other companies.

Given that the owners of any leased vessels would probably not want to foot the bill themselves they may try to draft in the four partner lines that have containers on the ship or maybe even the companies whose cargo is inside those containers.


Image caption Hanjin's bankruptcy is the largest ever to hit the shipping industry

The ships owned by Hanjin itself would most likely have to be sold before anyone would bring in the money to get them into a port and cleared. The fact that they would have to be sold as is, i.e. at sea, and with a load of overdue containers on board would probably weigh down the price of the vessels.
Stranded sailors

Each stranded ship has about 15 to 25 crew on board. Unable to call at any port, they will have to depend on the supplies they have with them until a solution can be found. While food should last long enough, they will eventually need fuel.

In a worst-case scenario, should they find themselves unable to pay for fuel being delivered by a shuttle, they would risk running into serious trouble. In that case though, nearby ports would likely be forced to accept them.

Aside from the prospect of being stuck for weeks at sea, the sailors will also face uncertainly over their wages. Most of them are not actually hired by Hanjin but by crewing agencies. Those agencies are unlikely to get paid by Hanjin and therefore won't be able to pay the crews.

"Unless someone steps in very quickly - and there is no sign of that - this will last a very long time," according to Mr Jensen.

Ships, cargo and crew might find themselves stuck for weeks, if not months, without knowing when and where their current voyage will end.
SAVE AS MANY AS YOU CAN

Offline Palloy

  • Sous Chef
  • ****
  • Posts: 3754
    • View Profile
    • https://palloy.wordpress.com
Re: Official Shipping Collapse Thread
« Reply #43 on: September 02, 2016, 08:14:34 PM »
http://www.zerohedge.com/news/2016-09-02/ripple-effect-could-be-tremendous-retailers-demand-government-bailout-after-hanjin-c
"Tremendous Ripple Effects" - Retailers Demand Bailout After Hanjin Collapse Paralyzes Trade
Tyler Durden
Sep 2, 2016

When we first reported about the imminent paralysis of an unknown number of global supply chains and a potential shock in worldwide trade as a result of the historic bankruptcy of Hanjing Shipping, one of the world's largest container shipping companies which handles 8% of Trans-Pacific trade volume for the US market, we concluded that "the global implications from the bankruptcy are unknown: if, as expected, the company's ships remain "frozen" and inaccessible for weeks if not months, the impact on global supply chains will be devastating, potentially resulting in a cascading waterfall effect, whose impact on global economies could be severe as a result of the worldwide logistics chaos. The good news is that both economists and corporations around the globe, both those impacted and others, will now have yet another excuse on which to blame the "unexpected" slowdown in both profits and economic growth in the third quarter."

However, not even this extreme forecast captured what would happen just 48 hours later, when as the WSJ reported overnight, retailers have gone far beyond simply blaming the Hanjing bankruptcy for their upcoming woes: they are petitioning for a government bailout, or as the WSJ put it, they are "bracing for a blow as they stock up for the crucial holiday sales season, asked the government to step in and help resolve a growing crisis."

Or, as America's banks would call it, "get bailed out." And, in taking a page right out of the 2008 bank bailout, the doom and gloom scenarios emerge:

“While the situation is still developing, the prospect of harm is significant and apparent,” Sandra Kennedy, president of the Retail Industry Leaders Association, wrote in a letter to the Department of Commerce and the Federal Maritime Commission. Hanjin’s recent bankruptcy filing “presents an enormous challenge to U.S. shippers,” she said, and “could have a substantial impact on consumers and the economy at large.”

The trade group is urging the U.S. to work with ports, cargo handlers and the South Korean government to resolve the widespread disruption in freight shipments caused by the Hanjin bankrupcy filing. Futhermore, the spokesman for the Retail Industry Leaders Association said they’re hoping the South Korean government could help provide clarity and speed to the bankruptcy proceedings, which are being considered by courts there.

To an extent, the group has a point as the "clogged supply-chain" chaos unleashed by the Hanjing bankruptcy is rapidly spreading. As reported Wednesday, after the company's bankruptcy protection, on Wednesday, terminal operators, ports, cargo handlers, truckers and others have refused to handle its cargo, for fear they won’t get paid. That is causing turmoil at U.S. ports and beyond, said shippers, importers and freight forwarders. Then as we followed up yesterday, U.S.-bound cargo has been delayed at the point of origin, and cargo-laden Hanjin ships are unable to get into U.S. ports. Worse, already delivered cargo is sitting unhandled, clogging ports and occupying containers needed elsewhere. Several Hanjin ships have been seized by creditors or barred from shipping cargo from Busan, South Korea’s main port, and vessels have been turned away from ports in the U.S., China, Canada, Spain and elsewhere.

According to the WSJ, freight brokers in Asia said about 540,000 containers are expected to face delivery delays that one of them said could range from a few days to more than a month. Meanwhile, as we also reported yesterday, shipping rates have soared as freight capacity shrank overnight, and indicative rates from Busan, South Korea, to Los Angeles had risen to $2,300 a container by Thursday, up from $1,700 four days earlier. One U.S. importer said he was getting rate quotes of $2,000 a container, compared with $700 before the Hanjin news.

Meanwhile, the reason why we immediately speculated that retailers will immediately use (and abuse( the Hanjin bankruptcy as a scapegoat (and apparently, demand a government intervention) is because the turmoil will only aggravate problems for retailers grappling with the challenges and high costs of e-commerce and at a crucial time. Those most likely to be affected include Wal-Mart, Target, J.C. Penney and clothing retailers. As the WSJ adds, a target spokeswoman said the retailer is watching development closely and assessing the situation. Marilee McInnis, a spokeswoman for Wal-Mart, said, “Right now, we are waiting to hear the final determination on bankruptcy proceedings and the implications to their current assets before we will be able to assess any impact.”

The biggest hit may come for the $25 billion US toy industry, however, which has been sweating the Hanjin news, as it prepares for the holiday season, responsible for half its annual sales. Jeff Bergmann, managing director of the Toy Shippers Association, said his customers are fortunate that only about 20 containers are on Hanjin or affiliated vessels. They’ve been told their freight will be delivered to the ports, but from there, “nobody knows,” Mr. Bergmann said. Beyond that, the general concern is how long the turmoil will last. “The ripple effect could be tremendous,” he said.

Cited by the WSJ, Jessica Dankert, senior director at the Retail Industry Leaders Association, said the congestion is coming during one of the worse possible times for retailers as they stock up before the critical holiday-shopping season. “These concerns would be trouble at any time, but this is a particularly bad time for it to happen.” She said retailers are considering contingency plans that include using other carriers and working to get their cargo released.

Unfortunately, going the litigation route will be a disaster, as cargo reclamation would bottleneck the legal system and leave it stuck in limbo for years. Even without a lawsuit, cargo owners will have to wait for months to get their cargo off Hanjin ships, analysts said.

    ”In 2001, Cho Yang, a much smaller Korean carrier, went bust and it took six months before a mere 200 containers, handled by a single freight forwarder, could be taken off to ports,” said Lars Jensen of Copenhagen-based SeaIntelligence Consulting. “This is at a much bigger scale so I would not be surprised if scores of boxes on stranded Hanjin vessels ever actually make it to their destination.”

But forget the retailers, will someone please think of the ship crews? Hanjin ships carry crews of 15 to 25 sailors, and with the vessels unable to call at ports, the sailors could be stranded at sea for weeks or longer. “They have food and water for a couple of weeks,” said Basil Karatzas of New York-based Karatzas Marine Advisors & Co. “Beyond that, things may become very difficult because suppliers will no longer extend credit to Hanjin and everything must be paid in cash.”

Maybe instead of US retailers using debt to buyback their stocks and land their management teams record bonuses, it is the crews who should be petitioning for a government rescue.

Finally, anyone hoping for a quick resolution to chaos unleashed by the Hanjin bankruptcy, should not hold their breath. While Hanjin has obtained creditor protection in Korea, and secured an injunction protecting its ships against seizure domestically, it needs to quickly file for bankruptcy abroad, especially in Europe and the US, in order to keep its ships moving.

“They got the injunction in Korea, but most of their ships are out at sea or at foreign ports. Ship seizures will continue and increase around the world if there is no bankruptcy protection.” Jensen said. “But sorting out such legal matters at various jurisdictions is complicated, as Hanjin has no control on how fast foreign courts will examine its case.”

For now, the only thing certain is that chaos will grow exponentially courtesy of today's ultra sophisticated "just in time" supply chains which are amazingly efficient when they all work in sync, and just as easily lead to unprecedented problems (as we described several years ago in "Trade-Off": A Study In Global Systemic Collapse") when even the tiniest bottleneck emerges, quickly snowballing into a crisis of epic proportions.
The State is a body of armed men

Online RE

  • Administrator
  • Chief Cook & Bottlewasher
  • *****
  • Posts: 32710
    • View Profile
Re: Official Shipping Collapse Thread
« Reply #44 on: September 02, 2016, 08:27:32 PM »
http://www.zerohedge.com/news/2016-09-02/ripple-effect-could-be-tremendous-retailers-demand-government-bailout-after-hanjin-c
"Tremendous Ripple Effects" - Retailers Demand Bailout After Hanjin Collapse Paralyzes Trade

This is nothing.  Hanjin is just #7.  Wait until Maersk goes Tits Up.  ::)


RE
SAVE AS MANY AS YOU CAN

 

Related Topics

  Subject / Started by Replies Last post
3 Replies
2781 Views
Last post May 02, 2014, 07:47:34 AM
by Surly1
2 Replies
848 Views
Last post May 29, 2015, 12:42:48 PM
by MKing
5 Replies
1078 Views
Last post April 21, 2016, 01:58:06 PM
by Eddie