Hanjin collapse drives ocean rates up 50% overnight

02 September update: Reports coming in from around the world indicate that the Jebel Ali port in Dubai, the ports of Los Angeles, Long Beach, and Seattle on the US west coast are all barring Hanjin ships from docking. Additionally, it has been reported that Hanjin has ordered vessels currently at sea to stay at sea until bankruptcy protection measures are in place to keep them from being seized.

South Korea-based Hanjin Shipping, the world’s seventh-largest container shipping line, filed for bankruptcy protection yesterday, and the move has driven spot container freight rates through the roof.

Maritime consultancy Drewry reports the price (in US dollars) of moving a forty-foot container on major lanes from Shanghai jumped as follows:

• Up 19% on the Shanghai-New York route to S$2,151,
• Up 39% on the Shanghai-Rotterdam route to $1,826,
• Up 42% on the Shanghai-Los Angeles route to $1,674

According to Reuters, things are even worse ex-Korea, with rates between South Korea’s Busan port and Los Angeles up 55% to $1,700 per forty-foot container, and up 50% to $2,400 to the US East Coast.

But this is about far more than just rates. The Korea International Trade Association said ten Hanjin ships were seized yesterday in Chinese ports, and ports in the US and Europe are reported to be considering barring entry to Hanjin vessels currently en route.

This puts the approximately 540,000 TEU of cargo currently loaded on Hanjin ships in limbo. Much of it is consumer goods intended for the holiday shopping season in North America and Europe, and it is not clear that it will be able to be delivered in time.

And not only is the future of the cargo currently at sea on Hanjin ships in question, but many reports indicate that finding other ocean carriers to take cargo booked on Hanjin, but not yet loaded, is not easy.

All of which points to a potential spike in demand for air freight ex-Asia, and ex-Korea particularly, as shippers and forwarders scramble to ensure that shelves are stocked with consumer goods in the holiday season.

We will update this post as we learn more about the impact of the Hanjin collapse on the air freight industry. And, of course, it will be discussed in detail at the Cargo Facts Symposium in Miami, 10 – 12 October. To register, or for more information, go to CargoFactsSymposium.com.

For those interested in its impact on the ocean freight industry, we provide the following links:

An excellent report on The Loadstar.

Coverage of the story by Reuters.

Spot rate analysis by Drewry.