Hanjin Shipping Bankruptcy Causes Turmoil in Global Sea Freight

Crawford & Company® reported today that it continues to receive a steady stream of claims from owners of cargo affected by the insolvency of shipping company Hanjin. Hanjin Shipping was Korea’s largest container carrier and one of the world’s top-10 container carriers—transporting more than 100 million tons of cargo annually. Its fleet consists of about 150 container ships and bulk carriers.

The update comes as creditors passed their deadline for registering claims in November against the company, and insolvency proceedings continue in Korea and the U.S. courts.

In a statement today, Crawford®’s European Head of Marine & Transport, Bart Hoogstad, said, “At a global shipping level, it appears that the Hanjin crisis has accelerated a number of global shipping consolidations and mergers. Hanjin was the world’s 7th largest carrier, and mergers of the other Asian-based carriers—such as China Shipping, COSCO and NYK—are being described by a number of observers as a ploy designed specifically to avoid Hanjin’s fate.”

Hanjin filed for bankruptcy protection on 30 August with a draft rehabilitation plan now due on 3 February 2017. “It is unlikely to result in full recovery for claimants even if it succeeds,” said Hoogstad.

He added that most Hanjin vessels have unloaded their cargo while others have redelivered cargo to shippers. Some vessels with cargo are still under arrest and others are being held at ports.

“The widely anticipated ‘flood’ of cargo insurance claims related to the incident has manifested as a steady and constant number of new instructions, making prediction of the overall quantum of loss to cargo insurers very difficult,” Hoogstad said.

Crawford continues to receive claims advice from multiple sources, most of which are claims for reshipping, forwarding charges, substitute storage expenses, and loss mitigation costs, including legal fees.

Bart Hoogstad added, “Each case must be reviewed on its merits and the coverages available under the insurance(s).”

Editor’s Note: Crawford first released a Market Update on the Hanjin Shipping Corporation Insolvency on 1 September 2016.

GTS-Marine-Transportation

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