Analysts had been waiting for the perfect storm a long time and it finally arrived. If you look at it a little bit closer, it is a shocking but fascinating sight because it allows you to see the essence of logistics, its true nature. They call it “the physical Internet,” and when you see it you truly realize what globalization means. It happened in the container shipping sector: The world’s seventh largest shipping company, the Korean company Hanjin, went bankrupt. Overburdened by $4.5 billion in debt, it has not been able to convince the banks to continue their support.
As a matter of fact, it did not convince the government of South Korea, because the main financier of Hanjin is the Korean Development Bank, a public institution, which is also struggling with the critical situation of the other major shipping company, Hyundai Merchant Marine (HMM), and the two Korean shipyards, STX Offshore & Shipbuilding and Daewoo. It may sound like a mundane administrative issue, but imagine what it means to have a fleet of about 90 ships, loaded with freight containers valued at $14 billion, roaming the seas because if they touch a port their loads are likely to be seized at the request of creditors.
The seized cargo
In fact, the Daily Edition of the Lloyd’s List dated Sept. 13 — the day I wrote this article — reported that 14 ships had already been seized. Other ships are being held in different ports, waiting for judiciary sentences. Others are at anchor and maybe had to refuel. Not to mention the 1,200-1,300 crew members who are not able to find suppliers willing to sell them a can of tuna or a bottle of water. In a Canadian port, the crew had to be assisted by the mission Stella Maris.