Within a day of Hanjin Shipping filing for bankruptcy protection spot rates were soaring by 39%, as shippers rushed to find alternative space.
The Shanghai Containerised Freight Index recorded a 36.5%, or $254 per teu, increase in container spot rates for North Europe, with further jumps anticipated this week as carriers fully implement GRIs and FAK increases.
The Loadstar reported on Friday that of the 100 container vessels in Hanjin’s fleet, 52 were off-schedule, with 46 vessels not yet arrived at their next scheduled port and 6 vessels were late departing – most held.
Estimates suggest there are around 500,000 teu of cargo held for or loaded on Hanjin ships, with many facing delays, as legal teams battle over ownership of containers.
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With space already tight before the Hanjin crash it is not surprising that rates have gone through the roof.
Even with further restrictions on space most shippers will be reluctant to use any other CKYHE carriers because of concerns about recovery of freight and termination of their slot sharing arrangements.
Given the overlap between the governing law of contracts and the rights of the receiver in the rehabilitation to cancel such contracts, Hanjin’s alliance partners may be looking to collect their own cargoes from Hanjin vessels, and to bar Hanjin cargoes from being loaded onto their vessels.
The demise of Hanjin and travails of CKYHE could be seen as a potential lifesaver by rival carriers who will use the sudden decrease in supply to bump low paying freight, renegotiate contracts in their favour and impose premiums to guarantee shipment.
But will their optimism be short-lived?
When United States Line collapsed in 1996 – the last time a major line disintegrated – most of its fleet was swiftly returned to the trade by other carriers.
In Hanjin’s case, Hyundai Merchant Marine has already indicated that it will most likely take over the operation of many of Hanjin’s directly-owned vessels, while owners of its chartered ships will doubtless seek a swift return to the market, even if it is at a lower leasing cost…………….potentially returning volumes to where they were BEFORE the Hanjin collapse.