There is still uncertainty about the consequences of a collapse of the South Korean shipping company Hanjin. An official bankruptcy has not yet been announced; however, this is already expected by many parties worldwide. For the fruit and vegetable sector, the lack of Hanjin's ships will have noticeable consequences.
Earlier this week, the sailing company was thrown a lifeline; a very small one. A group of investors is prepared to inject 90 million dollars into Hanjin, subject to certain conditions; however, that sum is a drop in the ocean. Hanjin closed 2015 with a debt of $60 billion. The millions now offered would be just enough to allow the ships that are now at sea to arrive at ports.
Of a fleet of 141 ships, there are currently 79 sailing aimlessly across the oceans. These ships are unable to dock in ports. Hanjin's vessels are no longer welcome in the ports of China, Spain, the US and Canada, among other countries. According to reports, there may be 14 billion Euro worth of cargo in the ocean on board ships unable to dock.
This already guarantees delays for the containers that are on board of these ships. When the ships will be allowed to dock in a port remains unclear. Besides the delays, the supply is likely to fall in the maritime sector. The Financial Times calculated that if the 95 ships owned by Hanjin are phased out, it will result in a loss of 620,000 TEUs. For the container shipping industry, which has been struggling for years with overcapacity, this is favourable. For importers and exporters, however, this may mean higher rates. According to reports, the tariffs for transportation from South Korea to the US have already increased.
This upward trend is likely to continue in the short term. With fears within the sector, Hanjin's customers will be forced to look for other shipping companies. In the longer term, it is uncertain how prices will develop. In the United States, apple growers in Washington are already certain about the increase in prices. "This is going to take its toll on many shippers, especially in Washington, because the apple harvest is about to start," said Noe Chavez, of Accelerated Global Logistics to BizJournals. The apple harvest in the state is worth about $ 2 billion and is shipped largely to Asia.