The ailing South Korean container carrier Hanjin Shipping reduced the number of its stranded ships to 34. Since Hanjin Shipping filed for court receivership, the company’s vessels around the world were denied entry into ports over payment issues or not allowed to leave.
A government task force handling the Hanjin crisis held the seventh meeting co-chaired by the chiefs of the Ministry of Strategy and Finance and Ministry of Oceans and Fisheries on September 17 and announced that the the number of stranded Hanjin ships idling off the coastal waters around the world dropped to 34, down by two from 36 as of the 14th when the sixth meeting was held.
Hanjin Shipping operates a total of 97 container ships and 28 of them were fully unloaded. After the 14th, the Hanjin Spain and the Hanjin Greece offloaded at the ports of Valencia in Spain and Oakland in the U.S., respectively. The government said that it is holding negotiations to ensure that the Hanjin ships holding their positions off coastal waters will be permitted to dock and unload at the ports in New York, Singapore and Mexico early next week. The company’s 35 other ships, which failed to dock or unload at the ports overseas, will be on their way back to Korea.
The task force team also talked about the current situations of the stranded ships and ways to handle them and 35 other ships to return to Korea as well as the progress of unloading and stay orders.
The government plans to hold another meeting early next week to gather opinions how to handle Hanjin ships that are returning home.
Source: businesskorea
Cosco notice: We will always be there for you
Recently the global shipping market has undergone a massive service disruption with the Hanjin bankruptcy filing. This has created a severe crisis to our customers. We understand that you expect nothing less than a reliable shipping enterprise with a guarantee of timely service and active measures to ensure the interests of our clients and their cargo. We at COSCO Shipping Lines have launched the integration of COSCON and CSCL and resolve to a strong sense of responsibility while keeping a close watch over our client’s cargo. The goal is to strive for mutual success, as we always have and will continue to do so in the future.
We keep the promise to our customers
When the bankruptcy crisis of HANJIN SHIPPING, an important member of our current alliance (CKYHE) sprang forth，our first thought that came to mind was how to protect the interests of our clients. We are actively in contact with alliance members and coordinating a response within the CKYHE remaining members. COSCO Shipping Line has created an action plan to ensure the transportation of our customers’ cargo has minimal impact to their business needs. Our active measures show COSCO Shipping Lines commitment to the customers which we deem as our primary responsibility. The alliance we made with our new partners (CMA, OOCL, and EMC) will be an alliance of service reliability and responsibility, both fiscal and operational. With the ongoing integration and launch of the OCEAN Alliance, we expect improvement to our service levels, to which our customers can be firmly confident in production and operations.
We will never give up for our clients
We pledge to stick to our traditional value of ‘Being a Responsible Enterprise’ and do our utmost to improve our service quality. COSCO Shipping Lines has undergone years of trials and tribulations in the global shipping market. In times of difficulties we prioritized a decision to pursue and maintain high service quality rather than lower end bottom line approach as some of other competitors have chosen to do. It is our strong sense of responsibility to our clients that supports us along this path. We know better than anyone else that customers’ interest will be improved only under the condition that we continue to strive to improve and achieve. Through constant self-improvement we shall see our position strengthen within the global shipping market. Through the integration we now have a carrying capacity of 1.6 million TEUs, over 330 trade lanes and a service network that cover the entire global shipping market. This enables us to provide abundant transportation paths and schedule frequency. We believe all these benefits will bring some stability to the current market uncertainty.
We strive to develop and grow with our customers
We share the same goals with our customers to lay a solid foundation of global transportation. Upholding the customer-centered approach we will do our best to meet the demands of our customers and provide optimized Door-Door transportation solutions. As a loyal partner of customers worldwide, both global and local, our responsibility lies not only in exceeding satisfaction of customer’s transportation demands, but also a professional manner to support their development. From vehicle Knock-Down (KD) parts delivered to the auto production line with punctuality, to well-preserved seafood sent into the freezer of the supermarkets around the world as well as next seasons’ newest fashion launched in the worlds department stores, are all vivid illustration of COSCO Shipping Lines unremitting efforts towards development of our customers business. By defining the ‘customer’ as a priority, we can provide transportation by sea and by land without limits to our service. There is no greater success than our customers’ satisfaction and perfect experience every time they work with COSCO Shipping Lines.
In times of crisis you discover true service partners. We resolve to build first in class shipping enterprises with global competitiveness that creates value for our customers. COSCO Shipping Lines reliable service quality and responsible professional conduct will surely be a solid foundation of our long-term cooperation now and in the coming years ahead.
Source: coscon
Bubbles always go pop: capitalism and the Hanjin bankruptcy
- Written by Chris Bambery
- Published in Analysis
Chris Bambery takes a look at what happened to Hanjin shipping company and what it tells us about comptemporary capitalism
A seafarers life is not always a happy one. Spare a thought for seafarers aboard container ships owned by the South Korean corporation, Hanjin, the seventh biggest shipping company in the world. For over a month now, since the company went bankrupt with a staggering $5.4bn worth of debt, half its 141 vessels have been blocked from docking at ports across the oceans with others impounded in port because of Hanjin’s unpaid fees.
The crews have been forced to stay on board and are only now beginning to be allowed home after matters have proceeded through the courts. On board the stranded ships are 400,000 containers holding goods worth $14bn ranging from Samsung tablets and smart phones to waste paper.
Eventually the majority of Hanjin’s container ships will be sold, snapped up by its rivals at a bargain price. The older ships will be sent to India to be scrapped. Once its seafarers get home they will have to look for a new job, and the other shipping lines can seize the chance to hire experienced crew at lower wage rates.
What is going on in the global shipping industry is straight out of Karl Marx’s “Capital.” First we have the rise of monopolies. The top 10 container shipping lines control 63.5 percent of the market, up from 49.3 percent in 2000. They work together to control shipping routes, fix prices and so on are but are also in deadly competition. Making a profit is not enough because each of these corporations also seeks to expand its market share, and that involves investing.
Recent years have seen them building bigger and bigger ships in order to capture more of the market, to the cost of their competitors. Shipping costs dropped against a background of global trade figures which have not recovered to their 2008 pre-financial crash figure.
The Los Angeles Times quotes a shipbroker as saying: “They just keep slitting each other’s throats with lower rates.” He adds: “They’re building larger and larger ships to increase their capacity so they can cut costs, but with each larger vessel ordered they’re making the market worse. For at least the last five years it’s been a fight to the death,” the US shipbroker adds.
This has created a crisis of overproduction, there are simply not enough cargoes for all these ships, and of overaccumulation, where the costs of investing in new vessels outstrips the money made from shipping and handling cargoes, the profit extracted from the crew. The vessels don’t make any money themselves unless they are loaded, sailed and docked.
The top five shipping lines – APM-Maersk (Danish based), Mediterranean Shipping (Swiss based), CMA CGM Group (French based), COSCO Container Line (Chinese) and Evergreen Line (Taiwanese-based) – can probably survive by drawing on their reserves. But others, Japanese Nippon Yusen and the South Korean Hyundai Merchant Marine Co look vulnerable.
It’s worth talking about what’s going on in the shipping industry because it’s a reminder of what fundamentally causes economic crises, and why they repeatedly happen. The 2007-2008 crash was triggered by the financial crisis but underlying it were the same problems we see with the collapse of Hanjin.
Since 1982 the global economy had experienced growth, in large part on the back of the neoliberal measures introduced by Reagan, Thatcher and others which benefitted the corporations at the expense of the workers. But this period of growth was punctuated by periodic crises which should have acted as warnings of what lay ahead.
In the 1990s the Asian Tiger economies – South Korea, Hong Kong, Singapore and Taiwan – were being hailed as miracle economies. Helped by their respective states they had targeted specific sectors of the global economy and succeeded in breaking in. The huge industrial conglomerates, known as chaebols, had invested massively to capture market share. But by 1997 Goldman Sachs estimated that while their output was worth hundreds of billions of dollars, they had $65m in profits.
In 1997 the Asian Tigers crashed and the US ruthlessly used the International Monetary Fund to bail them out at the cost of austerity programmes. They recovered, but never to the giddy heights of the 1990s.
In 2000 the US was hit by the dot.com crisis when the success of eBay, Amazon and AOL led to investors rushing to place their money because massive profits lay in wait. In March 2000 World.com filed for bankruptcy and it soon became clear other companies were in trouble. Investors took fright and sold up for whatever they could get. The US experienced a short, sharp recession.
Such bubbles are a constant feature of capitalism. But overproduction and overaccumulation are a constantly reoccurring feature of the system.
Last week a British venture capitalist wrote a piece in City AM on fin-tech, warning that investment there had reached “saturation point.” His solution was for the industry to shift from financial services to pensions and insurance. In large part that is because the banking industry has been fighting back against the challenge posed by these upstarts and had more money to deploy in investing in the new digital economy, but it’s also because investors, largely venture capitalists, are cooling in their ardour for fin-tech because the returns aren’t meeting their expectations.
The problem facing fin.tech firms trying to seize a section of the pensions or insurance sectors is that they will come up against the big corporations there too.
Fin-tech sounds like another bubble waiting to go pop. Meanwhile spare a thought for those seafarers stranded off Singapore or Long Beach. As always it’s the people that do the work who create the profits. They are also the ones who pay the price for this crazy system that will waste billions by building too many container vessels because a handful of corporations will beat their rivals into the grave in order that they can survive.
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