A potential consequence of Hanjin Shipping’s failure is that the containership industry may finally improve its financial status as a major player exits the stage.
Low rates for containerised goods have provided a global supply chain for consumer goods but that supply chain has faced increasing risk from financially tenuous shipowners such as Hanjin.
Containership rates are currently running at about 65% of the level seen prior to the 2008-2009 recession, according to the Transpacific Stabilization Agreement, a containership trade group. Since 2011, the containership industry has only shown sporadic profitability, with most shipping companies racking up continuing losses.
Despite its ongoing losses, Hanjin played a role in supporting South Korea’s broader multi-year goal of becoming a major exporter and, as such, enjoyed tacit state support to remain afloat.
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