Image Courtesy: Hanjin Shipping
The disruption to cargo services made by South Korea-based Hanjin Shipping has pushed up spot freight rates temporarily creating better conditions for other container shipping companies which stepped in to plug the gap, according to Moody’s rating agency.
“Hanjin’s woes are occurring at a time traditionally considered the busiest time of the year for the industry. Among those who stand to benefit from higher rates in the short term are Maersk Line, Hapag-Lloyd and CMA CGM,” Maria Maslovsky, a VP-Senior Analyst at Moody’s, said.
Hanjin filed for court receivership on August 31, which resulted in parts of its fleet having effectively been stranded at sea as some ports refused to unload the cargo out of concern that they will not be paid for their services. The length of the disruption is uncertain although slow progress is being made, Moody’s added.
The carrier’s parent company, the Hanjin Group, and its chairman, have announced plans to provide financing to the troubled firm to help fund the unloading of its cargo ships.
“Still, given the dire straits in which container shipping industry finds itself in the current environment, a temporary removal of Hanjin’s ships from operation will provide a much-needed boost to cash flows,” Moody’s said, adding that even a few weeks of operations at improved freight rates during liners’ busiest quarter will be a plus for the third quarter results of container liners.
Rates increased by 42% per forty-foot equivalent unit (FFE) on the Shanghai-Los Angeles route, 19% on the Shanghai-New York route and by 39% on the Shanghai-Rotterdam route following the Hanjin’s receivership filing, according to Drewry. The increases follow consistent declines in freight rates in 2016.
Moody’s notes that the uncertainty surrounding Hanjin is likely to be credit negative for vessel owners that charter out their ships to the company at least in the short term.
Source: http://worldmaritimenews.com