T Nation

Hanjin Shipping


#1

Hanjin Shipping has collapsed. Why would you care?
It was the 7th largest shipping company in the world. They accounted for @ 7% of the Far east to North America container trade. An estimated 25000 containers were crossing the ocean each day on Hanjin vessels. They are being blocked at American ports and ports worldwide with some being seized for money owed. Some companies that were shipping with Hanjin exclusively may also go under or suffer serious losses if they can’t get new shippers. I believe LG used Hanjin exclusively.
Right now is a peak shipping time with Christmas coming up. Exports have to be taken back out of terminals, unloaded and reloaded into other companies containers, such as Evergreen, Hapag, or MSC, and have to be booked onto new vessels. Not simple as many ships are maxed out already and delays to add more cargo could make getting to the Panama canal on time for transit tight. You lose your spot in line and you have to wait for possibly months or go around the tip of South America. This may put Korean exports/imports 3+ months behind plus whoever else Hanjin was also carrying.
Imports are in limbo as some vessels are now anchored outside ports as they are running out of fuel. These containers will have to be transhipped onto other vessels and the cost will paid by the customer shipping the cargo which will be passed onto the final customers. There are @540000 TEU of cargo on these vessels. A TEU equals one 20ft container.
The price of shipping cargo has jumped a bit. From Busan, Korea to LA $1100 to @$1700 per container and Busan to the east coast via the Panama canal $1600 to @$2400 per container. Not sure of the rate increases for Europe and Australia routes. Increases will be passed along of course.


#2

So? Companies go under all the time. 7% market share of one region of the globe is a minor speed bump. Hanjin competitors will buy up all of Hanjin’s vessels and other assets to make up for the capacity deficit. Life goes on…


#3

true but the repercussions in shipping delays can be a nightmare for some. don’t know if Takada is shipping air bags by Hanjin but if so there could be even longer delays in getting them replaced. example of 200+ containers with @1000 bags each and someone is waiting a few more months. almost all manufacturing is now working as MAN (materials as needed). they depend on the parts to arrive on time and only keep @7 days extra. no parts no work. an example is a manufacturer of sport and luxury automobiles in the southeast US. a few years back it was a really stormy Atlantic winter that caused delays in shipping of a few weeks to a month+. the plants had no parts so they shut down the lines and sent their workers home. all the support companies also sent their workers home. the part you’re waiting on to repair your car won’t be here for a few more weeks. The reefers containing Kosher gel caps for medicine won’t reach the pharmaceutical companies in Europe. giant tires for construction equipment in Africa won’t arrive on time throwing things behind. shipping works on a tight schedule and while it will get caught up it can cost millions+ if delayed.


#4

And that is the problem with this JIT (just in time) delivery shit. Oh wait! If we made stuff here again, we wouldn’t have to wait on ships to bring it from China.


#5

Too much stuff made in different countries and lax environmental laws. Electroplating in a country with no epa means lower cost to consumers here. A vehicle totally constructed from parts only made in the US would be incredibly expensive. How many clothes do you buy that are only made locally from locally sourced materials?


#6

JIT is a lean manufacturing method to keep low/no inventory so more money can be used elsewhere to continually improve the business.

If we made stuff here, JIT would still be used. The only difference is you would be complaining about how someone at the factory was sent home for the day because their product sat on the shelf instead of getting purchased.


#7

Have you ever been to a port? A container yard? Have you ever actually touched a container?


#8

Have you ever answered a question directly? Without answering with another question?


#9

Well yes I have, but a failed to read a question in your statement.

In regards to silverblood’s question, the answer is yes. I will buy a locally made product if at all possible, even if it’s a couple more bucks.


#10

Not sure why I thought I asked a question in my first post :confused:

My point is that JIT and where a prodcut are made are two separate things. The lead time involved in shipping a good needs to be factored into the JIT plan whether its made in the back, 100 mi away, or 10,000 mi away. A porrly setup JIT plan can fail for products that are made in the back of a store.

JIT can be used for both products made in America, and products made in China.