Three ships leased by Hanjin sold for $53m

A Hanjin ship stranded outside the Port of Long Beach in California on last Thursday. The South Korean shipping line's demise has disrupted global supply chains as stores in Europe and the United States stock up for the Christmas shopping season.
A Hanjin ship stranded outside the Port of Long Beach in California on last Thursday. The South Korean shipping line's demise has disrupted global supply chains as stores in Europe and the United States stock up for the Christmas shopping season.PHOTO: REUTERS

Bulk carriers no longer chartered by ailing firm, which has $19b of cargo stuck in ports

SHANGHAI/SINGAPORE • Three ships chartered to Hanjin Shipping have been sold and two more vessels are up for sale, ship brokers said yesterday, kicking off an asset sale sparked by the failure of the world's seventh largest container shipper.

Around US$14 billion (S$19 billion) of cargo has been tied up globally as ports, tugboat operators and cargo handling firms worried about not being paid refuse to work for Hanjin, which filed for receivership in a Seoul court on Aug 31.

While some ships have been offloaded since then, bottlenecks are forming at some ports and truck yards as containers pile up.

Three bulk carriers, used for carrying commodities such as iron ore, coal and grain, were sold by lessors for a total of almost US$39 million, according to data from ship valuation firm VesselsValue.

The largest, the 180,000 deadweight tonne (DWT) capesize Hanjin Matsuyama, was sold by Japanese shipping firm Kumiai Senpaku to Singapore-based Winning Shipping for US$22.75 million, according to the data.

An official at Winning said the deal had not yet been completed. The five-year-old ship, last tracked off South Korea, was sold charter- free, meaning it is no longer chartered by Hanjin Shipping, a ship broker told Reuters.

INDUSTRY SHAKE-UP

A lot of people hadn't expected the difficulties for Hanjin in the magnitude we have seen them. It will change behaviour.

HAPAG-LLOYD CHIEF EXECUTIVE OFFICER ROLF HABBEN JANSEN

The two smaller 37,000 DWT handysize vessels have been sold to Greek buyers, also charter-free, the broker said.

Vessels that are sold can be bought by their new owners with existing charter, or rental, agreements in place or charter-free, meaning they can be hired out to new firms such as commodities companies.

The collapse of Hanjin Shipping will probably spark fresh consolidation among container lines as they attempt to ride out the shock waves buffeting the industry, Hapag- Lloyd chief executive officer Rolf Habben Jansen said.

"A lot of people hadn't expected the difficulties for Hanjin in the magnitude we have seen them," Mr Jansen said in an interview in Hamburg on Tuesday.

"It will change behaviour", with some participants now assessing whether it might not be better to "team up", he said.

Hanjin's demise has disrupted global supply chains as stores in Europe and the United States stock up for the Christmas shopping season. While the gain in freight rates in the wake of the collapse may boost Hapag-Lloyd's revenue "a bit" this month and the next, that alone won't trigger a sustained recovery in the industry, Mr Jansen said.

A new wave of mergers may bolster the position of the biggest carriers, led by AP Moeller-Maersk's Maersk Line, in an industry that has witnessed the disappearance of five of the 20 biggest carriers in the past two years alone.

Transactions included the combination of China's two biggest liners and Hapag-Lloyd's takeovers of Chile's Cia. Sud Americana de Vapores in 2014 and UASC this year.

Whether or not Hanjin rivals will snatch up some of the 39 container ships owned by the South Korean company will depend on the strategy of the various vessel-sharing alliances, including Maersk's 2M partnership with Mediterranean Shipping, Mr Jansen said.

Only a handful of vessels in Hanjin's owned fleet are attractive for buyers, while several others are likely to be scrapped, Copenhagen-based SeaIntel Maritime Analysis said in a Sept 4 report.

"With average ages of close to 10 years, these vessels are likely not going to be very fuel-efficient," SeaIntel said.

REUTERS, BLOOMBERG

A version of this article appeared in the print edition of The Straits Times on September 15, 2016, with the headline 'Three ships leased by Hanjin sold for $53m'. Print Edition | Subscribe