South Korea’s cash-strapped Hanjin Shipping Co. is adrift at sea — and in more ways than one.
Hanjin is one of the world’s biggest shipping lines and filed for bankruptcy protection last week in Seoul. That’s created a bizarre situation on the high seas for 85 Hanjin ships that have been effectively marooned offshore as ports in the U.S., Asia and Europe have turned the company’s ships away. The worry is that Hanjin ships won’t be able to pay port fees or their contents might be seized by creditors, which would disrupt port operations.
The South Korean shipping company operates 97 container ships, the giant workhorses of global trade that deliver everything from computers and clothing to televisions and toys. The global shipping disruption comes just as companies are shipping merchandise to fill shelves and warehouses for the end-of-year holiday season.
“Our ships can become ghost ships,” said Kim Ho Kyung, a manager at Hanjin Shipping’s labor union. “Food and water are running down in those ships floating in international waters.”
From: Hanjin’s Ghost Ships Seek Havens With Food and Water Starting to Dwindle – Bloomberg
Two related links:
Shipping’s Moral Hazard
Hanjin as a Moral Hazard Case Study.Report
For owners whose vessels are underwater, there’s no need to be nice to the bank anymore.Report
Oddly enough, when talking about ships/shipping, a ship being underwater is always in the financial context, while a ship that physically sank is lost, or sunk.Report
While the costs of building that ship are sunk.Report
Eh, just sell it to Gillette.Report