On 31 August,the South Korean container shipping company Hanjin, the world’s seventh-biggest, declared bankruptcy.
The results are more dramatic than with most bankruptcies: vessels are trapped in ports, cargoes are being seized by creditors, South Korean exporters have their goods held up and are scrambling for new carriers (Hanjing carried 40% of Samsung exports and 20% of LG).
This is the first large container line bankruptcy since United States Lines in 1986, which had built itself a new fleet on the basis of high fuel prices and was wrongfooted when oil prices sagged. The background is that world trade has grown only very slowly since 2008, while container lines have large new capacity coming onstream that was commissioned before 2008.
