Executive Briefings

Cargo Owners in Flight to Safety After Hanjin Collapse, Shipping Lines Say

Cargo owners are becoming more concerned about risks and are shifting their business to shipping lines deemed more financially stable after the collapse of South Korea's Hanjin Shipping Co Ltd, top shipping executives said.

Robbert van Trooijen, Asia Pacific chief executive of AP Moeller-Maersk's container shipping arm, said the company was seeing a "flight to safe havens" after the August collapse of Hanjin left $14bn of cargo stranded at sea.

"It reminded the customer of the financial situation of many of the carriers in the trade," he said, adding most firms' financial stability was "not great."

"We've seen that the debate around the viability of the supplier is a more important element in the contracting decision... A lot of customers are looking at the more stable shipping lines to contract their cargo with," he said.

Hanjin became the biggest casualty of the shipping industry's worst ever downturn, which started after the 2008 global financial crisis as an excess of ship capacity and slowing trade dragged down freight rates.

Maersk's comments were echoed by Taiwanese rival Evergreen Marine Corp which also said it had recently provided relevant information to large U.S. companies to assure them of its financial health.

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Robbert van Trooijen, Asia Pacific chief executive of AP Moeller-Maersk's container shipping arm, said the company was seeing a "flight to safe havens" after the August collapse of Hanjin left $14bn of cargo stranded at sea.

"It reminded the customer of the financial situation of many of the carriers in the trade," he said, adding most firms' financial stability was "not great."

"We've seen that the debate around the viability of the supplier is a more important element in the contracting decision... A lot of customers are looking at the more stable shipping lines to contract their cargo with," he said.

Hanjin became the biggest casualty of the shipping industry's worst ever downturn, which started after the 2008 global financial crisis as an excess of ship capacity and slowing trade dragged down freight rates.

Maersk's comments were echoed by Taiwanese rival Evergreen Marine Corp which also said it had recently provided relevant information to large U.S. companies to assure them of its financial health.

Read Full Article