Ocean Shipping and Ports

On 30 August 2016 the creditors of Hanjin Shipping, led by the state-owned Korea Development Bank, decided not to lend it any more money. Hanjin was South Korea's largest container line and the seventh-largest in the world, with about 0.6 million TEU of capacity on roughly 95–100 owned and chartered ships, about 3% of the global fleet (reported). It had lost money in most years since 2011, it was paying charter hire contracted in 2010–11 at several times the market rate, and its parent group's offer of fresh money was, in the creditors' judgment, too small to close the gap. On 31 August Hanjin filed for court receivership in Seoul.

What happened next had never happened at that scale. A container line holds its customers' cargo in custody, and the businesses around a ship, terminals, stevedores, tug and pilot services, truckers, chassis pools and bunker suppliers, extend it credit every day. Overnight they stopped. Terminals refused to unload Hanjin ships for fear of not being paid; ship owners and fuel suppliers arrested its vessels in Singapore, China and elsewhere; ships drifted at anchor outside ports with their cargo aboard. Counts differed, from about 85 ships around 50 ports to about 93 ships at 51, and the cargo aboard was estimated at about $14 billion (reported), weeks before the US holiday season. Samsung asked a US court for help to get about $38 million of goods off two of the ships (reported).

The United States became the place where the rescue was improvised. Hanjin filed for Chapter 15 recognition in the US Bankruptcy Court in Newark on 2 September 2016, and Judge John K. Sherwood granted interim protection on 6 September and provisional relief on 9 September, on condition that Hanjin agree a protocol for delivering cargo to its owners. Emergency money from Korean Air and the group's chairman paid stevedores so that ships could berth; the Hanjin Greece was among the first to unload at Long Beach (reported). Some cargo owners paid twice, once to Hanjin for freight and again to terminals and truckers to release their boxes, while Hanjin's lawyers told the court that shippers were withholding up to about $80 million they owed it (reported). On 17 February 2017 the Seoul court declared the company bankrupt. Its Asia–US network went to the SM Group, and its majority stake in the Total Terminals International container terminal at Long Beach was sold, with MSC's terminal arm taking 80% and HMM 20%, for about $78 million (reported).