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Lessons from bankruptcy of Hanjin Shipping Company in chartering

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  • Sung-Ho Shin
  • Paul Tae-Woo Lee
  • Sung-Woo Lee

Abstract

This paper aims to analyze the charter contract management of major container shipping companies in response to fluctuations in shipping market conditions in terms of contract duration using data of containerships between 2010 and 2016. Duration analysis was conducted to examine the relationship between charter duration and shipping market conditions. Moreover, this paper explores the causes of Hanjin Shipping Company’s bankruptcy, drawing managerial implications. Test results from Cox PH (Proportional Hazard) model show that most container shipping companies in Europe having net earnings purchased large vessels instead of chartering vessels, while some ocean carriers featuring poor financial performance, in particular the Hanjin Shipping Company, chartered bigger ships with higher charter rates and longer duration. Contract charter rates and duration of Hanjin Shipping Company featured greater risk compared to competitors.

Suggested Citation

  • Sung-Ho Shin & Paul Tae-Woo Lee & Sung-Woo Lee, 2019. "Lessons from bankruptcy of Hanjin Shipping Company in chartering," Maritime Policy & Management, Taylor & Francis Journals, vol. 46(2), pages 136-155, February.
    • Handle: RePEc:taf:marpmg:v:46:y:2019:i:2:p:136-155
    DOI: 10.1080/03088839.2018.1543909
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    Cited by:

    1. Jaeung Cha & Jinwoo Lee & Changhee Lee & Yulseong Kim, 2021. "Legal Disputes under Time Charter in Connection with the Stranding of the MV Ever Given," Sustainability, MDPI, vol. 13(19), pages 1-25, September.
    2. Nowińska, Agnieszka & Schramm, Hans-Joachim, 2021. "Uncertainty, status-based homophily, versatility, repeat exchange and social exchange in the container shipping industry," Journal of Business Research, Elsevier, vol. 128(C), pages 524-536.
    3. Jason Monios, 2023. "When smooth space becomes turbulent: The collapse of Hanjin Shipping and the immobilisation of ships, containers, goods and people," Environment and Planning A, , vol. 55(2), pages 320-338, March.
    4. Kotcharin, Suntichai & Maneenop, Sakkakom, 2020. "Geopolitical risk and corporate cash holdings in the shipping industry," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 136(C).
    5. Zhuge, Dan & Wang, Shuaian & Wang, David Z.W., 2021. "A joint liner ship path, speed and deployment problem under emission reduction measures," Transportation Research Part B: Methodological, Elsevier, vol. 144(C), pages 155-173.
    6. Feng, Hongxiang & Grifoll, Manel & Yang, Zhongzhen & Zheng, Pengjun, 2021. "Latest challenges to ports in public-private partnership: Case of Dandong Port (China)'s bankruptcy," Transport Policy, Elsevier, vol. 110(C), pages 293-305.

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