Bulk Distributor Sept/Oct 16 - Page 20

20 BULKDISTRIBUTOR South East Asia September/October 2016 What does Hanjin collapse mean Case study: for South East Asia? Seaco T he Hanjin Shipping Co terminal at Busan, South Korea, has come to a virtual standstill as hundreds of containers stacked four-high wait on the dockside as cargo owners scramble to find alternative ways to send their goods. The port of Busan, 200 miles south east of Seoul, handled more than 70% of the containers that enter or leave South Korea. Until its collapse at the end of August, Hanjin – the world’s seventhlargest container – alone accounted for about 10% of goods that get loaded and unloaded. Now the port operators fear vessels could head to other ports in the region as the remaining shipping companies use large centralised transshipment ports like Singapore to store containers and distribute them among vessels in order to move goods more efficiently around the world. And while Busan faces an uncertain future of the asset sale of Hanjin has already started. Three of its chartered ships had been sold within two weeks of the company’s bankruptcy petition and two more were put up for sale. Analysts believe around $14 billion of cargo has been tied up globally as ports, tugboat operators and cargo handling firms refuse to work for Hanjin because of concerns about not getting paid. Bottlenecks are forming at some ports and truck yards as containers continue to pile up while Hanjin works to a court deadline of late November to formulate a financing plan that creditors agree to. However, the fleet of 63 ships Hanjin owns is estimated to be worth around $1.76 billion, well short of the $5.5 billion of debt the company reported at the end of last June. It had chartered a further 78 vessels before its failure. Around two-thirds of Hanjin’s fleet are not operating properly, including vessels seized, barred entry to ports or terminals, denied services or moving slowly, according to shipping data. Hanjin Shipping is to return all of its chartered vessels to their owners to cut costs, after the South Korean container line said it was losing $2m a day amid the logistics chaos prompted by its bankruptcy in August. The company has returned or plans to return soon 18 container carriers and 17 bulk ships to their owners while it scrambles to resolve the $14bn cargo logjam created by the industry’s largest bankruptc y in three decades. REGISTER TODAY! 1.888.482.6012 • logichem@wbresearch.com www.logichemus.com S eaco has been serving the container shipping industry for more than 50 years and it is one of the world’s largest container leasing companies, providing a fleet of approximately 2.2 million TEU across a diversified fleet of Dry Boxes, Reefers, Tanks, Specials and Swapbody containers. Seaco purchases new container equipment for leasing and re-leasing to 792 customers worldwide, delivering to 179 port locations across 49 countries and 420 third-party depots, and supported by an established network of appx. 200 Seaco employees, providing expertise in regional/global container leasing and sales solutions. With a rich history in container design, manufacturing and equipment supply, Seaco has one of the world’s largest and youngest container fleets to support every cargo including, liquids, powders and gases. Due to the acquisition of Cronos in 2015, Seaco has doubled its fleet size to over 40,000 tanks, offering a diverse portfolio of T11 to T50 ISO tanks. As Seaco continues to invest and grow the size of its fleet with market demand, the focus is on niche markets where Seaco has the equipment to provide flexible bespoke solutions to service customer needs and in line with market developments. QUALIFIED CHEMICAL MANUFACTURERS GET 25% OFF WITH DISCOUNT CODE: LC16BULK December 12-13, 2016 • The Westin Philadelphia, Pennsylvania Be Supply Chain Smart The Premier Event for Chemical Supply Chain & Logistics Professionals “Excellent forum for sharing excellent practices, staying current on supply chain developments and interacting with professionals with common interests.” Dave Gleason, Sr. Director, American Chemistry Council In South East Asia, one of the key challenges the industry faces, is the lack of available and qualified professionals with the level of knowledge and expertise to facilitate customer needs. It is proving to be a perennial problem and training to upskill is necessary in order to address the knowledge gap in this region. The other challenging factor is the growing demand for good tank repair and maintenance facilities, in order to cope with strict industry rules and safety procedures. As repair regulations differ across South East Asia, there is an urgent need for a more standardised working mandate. So far in 2016, the market has been slow and there is an oversupply of tanks worldwide. This being said, the industry is experiencing some growth in the bulk liquid market and a continued shift from parcel tankers to ISO tanks. There is a growing trend towards the provision of flexible supply chain solutions, notwithstanding the still prevalent use of flexi-bags. While larger tanks attract relatively more demand, there is also a growing trend for gas, LNG and lined tanks. The increasing awareness of health and safety issues in relation to hazardous cargo handling, has led to more enquiries for ISO tanks. However, the market is not growing fast enough to absorb the oversupply and it will take some time for the market to neutralise the overhang situation that both leasing companies and operators currently face. With greater global competition, this has subsequently pushed down rates and triggered an increase in demand for shorter flexible leasing terms by customers. Whilst the market continues to emerge, the industry may experience some weaker players dissolve or be acquired by bigger and stronger competitors. As the market consolidates with fewer new stocks, the oversupply situation may ease and the overall market may recover. Seaco aims to be a “value add” long term partner to our customers, providing the right container at the right place and at the right time.   Sponsors: WWW.BLUEPACK.DK