Nowhere to hide
COMMENT: Pundits have been saying for years that container lines need to merge or bow out to bring the box trade back to some semblance of normality. Hapag-Lloyd and UASC took note with a merger deal, while CMA CGM swallowed up NOL along with its sizable debts.
Yet others continue to run down global supplies of red ink to fill in their balance sheets. So the collapse of Hanjin Shipping shouldn’t have been a surprise; apparently, we all knew it was coming. Yet, the Korean shipping line’s unmajestic fall from grace has sent tsunami-sized waves throughout the industry.
It seems that no one had truly anticipated the ramifications of such a collapse on all parts of the chain. So interwoven is this business that the fall of one domino cannot fail to impact the others. From container lessors and freight forwarders to cargo owners and ship owners, the pain is being felt far and wide.
Terminals have been hit, with bills unpaid, cargo languishing on dock, and creditors banging on the gate to serve liens and arrest orders on the lucky few vessels that have managed to get to a berth.
Some terminals, though, are talking about Hanjin-related handling charges owed from May, well before the line requested the equivalent of bankruptcy protection in South Korea on August 31. This just goes to show how far terminals have been willing to go to attract and maintain the ‘big boys’ of the container world. Despite the woes of the container freight market, container lines have continued to command the terminal world, arbitrarily cutting and adding terminals to their services as they see fit.
They make these adjustments seemingly in ignorance of the millions of dollars being poured into terminals to allow them just to be in the running for containerised cargo from the major alliances.
Those same terminals offer favourable handling charges to stay in the game, but there’s little loyalty from the lines.
With an abundance of choice on terminals and more in the pipeline, container lines won’t be losing this upper hand any time soon. It’s up to ports to stop the rot through collaboration and co-operation – pushed as far as possible before the anti-competitive ‘police’ wade in.
Even if you haven’t been directly hit by the Hanjin debacle, there’s no sitting this one out. The shake-up has started; ports and terminals need to be proactively planning for when the next ‘what if’ becomes reality.
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