hanjin blues: a different ocean freight market now?
TRANSCRIPT
HANJIN BLUES: A DIFFERENT OCEAN FREIGHT MARKET NOW?
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ABOUTXENETA
At Xeneta we believe there is an untapped potential for everyone in the industry, to systematically learn from our individual and collective efforts. We hold true that "if you cannot measure it, you cannot improve it". That’s why we think actionable metrics is the key to continuously evolve for every business, and ultimately the entire industry. Rethinking global logistics is the vision of Xeneta.
With international experience from the logistics industry, we have first-hand knowledge of the challenges related to high volatility and lack of transparency in the ocean freight market. By combining logistics background and information technology expertise, we found the solution to these challenges.
WE ARE TRANSFORMING GLOBAL LOGISTICS
ARE YOU PAYING THE RIGHT CONTAINER
FREIGHT RATES?
DISCOVER SAVINGS POTENTIAL IN REAL
TIME.
CONTACT US.
WE'RE A FEW BUSINESS DAYS PAST THE HANJIN BANKRUPTCY AND THE SHIPPING MARKET HAS CHANGED 180'. THE RAMIFICATIONS EXTEND FAR BEYOND THE DRY LEGAL NEGOTIATIONS OF THE COURTROOM.
WE'RE NOW LOOKING AT DRASTICALLY REDUCED
RETAIL INVENTORIES FOR THE CHRISTMAS SEASON
WHICH AFFECT THE AMOUNT OF RETAIL SALES HIRING,
AND SUBSEQUENT CORPORATE PROFITS.
SOUTH KOREA IS EQUALLY AFFECTED, AS THE THOUSANDS
OF CONTAINERS CARRYING (NOT
NOW!) ELECTRONIC PRODUCTS FROM
SAMSUNG AND LG WILL AFFECT THE
COUNTRY'S TRADE BALANCE AND
FOREIGN EXCHANGE RESERVES.
THREE HANJIN SHIPS ARE REPORTED ARRESTED, PUTTING FORWARDERS, MANUFACTURERS, AND TRADERS AT RISK FOR THEIR CARGOES, WHILE 36-51% SPIKES IN OCEAN FREIGHT PROMISE RECORD LOSSES ONCE THEIR CONTAINERS ARE LOCATED, RELEASED, AND EVENTUALLY RE-SHIPPED.
THESE ARE SERIOUS ISSUES. WITH 540,000+ TEU'S WORTH OF CARGO EITHER SHIPPED OR LOADED-TO-BE-SHIPPED FOR THE UPCOMING CHRISTMAS HOLIDAY SEASON, RETAILERS WHO STOCK KOREAN, CHINESE, OR PRODUCTS OF ANY COUNTRY SERVICED BY THE CKHYE ALLIANCE OF WHICH HANJIN WAS A MEMBER AND WHO MIGHT BE CARRYING HANJIN BOXES, NO ONE KNOWS WHEN THESE BOXES MIGHT BE RELEASED TO THE CONSIGNEES.
NOT A SURPRISING DEMISE
THE DEMISE OF A MAJOR CARRIER WAS NO SURPRISE; THREE YEARS OF DROPPING OCEAN FREIGHT RATES RESULTED IN LOSSES ESTIMATED IN THE $ 16 BILLION RANGE; WITH THE MAJORITY OF THE CARRIERS OFFERING FINANCIAL RESULTS.
THE CARRIERS ALSO BEAR SOME RESPONSIBILITY FOR HANJIN'S DEMISE. WHILE MAERSK'S TRIPLE WAS AN IMPORTANT STEP IN THE EVOLUTION OF CONTAINER SHIPS, MAERSK HAD BOTH THE CUSTOMERS AND THE FINANCING TO MAKE THEM FINANCIALLY VIABLE.
LET'S NOT FORGET HANJIN LEASED THE MAJORITY OF THEIR CONTAINERS, SO THE LIKELIHOOD IS THAT TRITON, TEXTAINER, TAL, AND OTHERS; AS HANJIN DEFAULTED ON ITS VESSEL CONTRACTS (US $ 18.6 MILLION-SEASPAN); THE LIKELIHOOD IS THE DEBT FOR THESE CONTAINERS WILL BE LITIGATED BEFORE THE CONTAINERS – AND THEIR CARGOES – ARE RELEASED.
FOR ALL THIS TO HAPPEN IN A WORLD ECONOMY AS THINLY-BALANCED AS TODAY'S, THESE CONSEQUENCES HAVE THE POTENTIAL TO BE CATASTROPHIC. LET'S SEE HOW THINGS UNFOLD.
LEARN HOW XENETA CAN HELPYOU GET INSIGHT AND
INTELLIGENCE INTO YOUR GLOBAL OCEAN FREIGHT PRICES AND CHANGE YOUR LOGISTICS
BUSINESS:
REQUEST DEMO NOW