1. INDUSTRY GAME-CHANGER:
September 15, 2016
INDUSTRY GAME-CHANGER:
THE HANJIN SHIPPING COLLAPSE
THE LONG ISLAND IMPORT EXPORT ASSOCIATION
Marsha Salisbury
Research Editor, The Journal of Commerce

2. AISLive ship tracking maps of Hanjin Shipping operating ships
THE HANJIN SHIPPING COLLAPSE: CONTAINER TRADE
AISLive ship tracking maps of Hanjin Shipping operating ships
Hanjin Shipping — by the numbers
Ocean container carriers & financial collapse — a history
South Korea government fund for ailing shipping firms
Timeline: Hyundai Merchant Marine, reorganization
Timeline: Hanjin Shipping, reorganization
U.S. Federal Maritime Commission
Chapter 15 of the U.S. Federal Bankruptcy Code

3. Container Carrier Mergers & Acquisitions, 2014-present
THE HANJIN SHIPPING COLLAPSE: CONTAINER TRADE
Container Carrier Mergers & Acquisitions, present
Top 10 Container Carriers in U.S. Trade, PIERS
Top 10 Global Container Fleet Operators, Alphaliner
Top 10 Global Container Fleet Orderbooks, Alphaliner
Shanghai Container Freight Index (SCFI) present, Shanghai Shipping Exchange
Hanjin Shipping sources for cargo and vessel information
Speaker contact and discount subscription information

4. AISLive — GLOBAL
The whereabouts of Hanjin Shipping's GLOBAL container fleet as of noon EST Sept. 15, 2016.
Source: AISLive is a sister product of The Journal of Commerce within IHS Markit,

5. AISLive — AMERICAS
The whereabouts of Hanjin Shipping's AMERICAS container fleet as of noon. EST Sept. 15, 2016.
Source: AISLive is a sister product of The Journal of Commerce within IHS Markit,

6. AISLive — EUROPE-MIDDLE EAST-AFRICA
The whereabouts of Hanjin Shipping's EMEA container fleet as of noon. EST Sept. 15, 2016.
Source: AISLive is a sister product of The Journal of Commerce within IHS Markit,

7. AISLive — ASIA
The whereabouts of Hanjin Shipping's ASIA container fleet as of noon EST Sept. 15, 2016.
Source: AISLive is a sister product of The Journal of Commerce within IHS Markit,

8. HANJIN SHIPPING CONTAINER TRADE – BY THE NUMBERS
September 1, 2016:
$14 billion Estimated cargo value, Korea Int’l Trade Association
8, Estimated number of cargo owners, Korea Int’l Trade Association
540,000 TEU Laden TEU aboard ships, Korean Ministry of Oceans & Fisheries
609,535 TEU Container Fleet Capacity, Alphaliner

9. Over 600,000 TEU fleet capacity at Chapter 15 filing: 2016
HQTRS:
SOUTH KOREA
USA
CHINA
TAIWAN
NORWAY
Over 600,000 TEU fleet capacity at Chapter 15 filing:
2016
Hanjin Shipping
About 100,000 TEU fleet capacity, prior to reductions:
1986
U.S. Lines
Under 100,000 TEU fleet capacity, prior to reductions:
2013
STX Pan Ocean
Hainan POS
Grand China Shipping
2011
The Containership Co.
2008
Dongama Shipping
Shandong Yantai
2004
Kien Hung Shipping
2001
Cho Yang
1995
Lykes Lines
1981
Seatrain Lines
Source: Alphaliner, others

10. South Korea Government Fund For Ailing Shipping Firms
New South Korea government US$1.2 billion fund for struggling South Korean shipping and shipbuilding firms is open only to those with debt:equity ratio below 400%. Created to bolster South Korean competitiveness requiring 'pain-sharing' by all interested parties. Both Hyundai and Hanjin were ineligible due to severely higher debt:equity ratios and both had debt payment issues including corporate bonds maturing in 2016 and In January the Korean Shipowners' Association requests immediate financial aid for both Hyundai Merchant Marine and Hanjin Shipping to overcome liquidity crises. In August the Korean Shipowners' Association presses for a Hanjin-Hyundai merger. In August, the second largest Korean container carrier, Hyundai proceeds into debt normalization plan with its creditors - while the largest Korean container carrier, Hanjin files for court receivership in South Korea.

11. 2016 Timeline — HYUNDAI MERCHANT MARINE
MARCH
Hyundai, the second largest Korean container carrier by TEU capacity, in voluntary restructuring agreement with creditors that include asset sales, debt adjustment with creditors and charter renegotiations. [Debt ratio was 5,307% on March 31.]
JULY
Hyundai signs agreement with creditors to proceed into debt normalization plan. Completes debt for equity swap for creditors after stakeholder 7:1 capital reductions. New shares to shareholders, creditors, bondholders and shipowners in debt-load reduction. State-run Korea Development Bank becomes largest stakeholder. [Debt ratio now 200% - and newly eligible for gov't funding.]
Hyundai signs binding agreement with the 2M vessel sharing agreement alliance of Maersk Line and MSC to commence in April 2017, remaining in the G6 through March Subject to various final negotiations and regulatory approvals.
SEPT.
New Hyundai management team to be announced.
FMC closed door staff briefing on 'Staff Briefing on the Maersk/MSC Vessel Sharing Agreement, FMC Agreement No ‘ on Sept [Hyundai to join this 2M VSA alliance in April 2017 subject to various regulatory approvals.]

12. 2016 Timeline — Hanjin AUG. SEPT.
Hanjin files voluntary restructuring plan with its creditors.
Hanjin creditors led by Korea Development Bank reject Hanjin plan. Despite creditors' request for increased capitalization, Hanjin declined to further amend plan. The Korean banks thereafter gave notice to stop financial support to Hanjin as of September 4.
Hanjin files main proceeding for court receivership in South Korea. Claims due Oct. 4, final report out Nov. 11.
SEPT.
Korea Ministry of Oceans and Fisheries estimates at least 540,000 TEUs are aboard Hanjin vessels as of the first week of September.
Hanjin seeks additional bankruptcy protection in all jurisdictions in which it operates.
Hanjin files for Chapter 15 bankruptcy protection in U.S. Bankruptcy Court, (Case No ).
U.S. Bankruptcy Court in Newark, N.J., Docket 22, issues Chapter 15 provisional interim relief order preventing ship arrests and asset seizures on Sept. 6 until hearing on Sept. 9, at which time it was extended.
CBP issues memo regarding documentation protocol regarding changes in Hanjin cargo movement/diversions.
The UK, Japan and Singapore issue relief orders preventing ship arrests and asset seizures.
Additional capacity announced by Hyundai Merchant Marine and regional South Korean carriers; 2M members Maersk Line and MSC; and CMA CGM.
A maritime lien was placed by federal Marshals on the Hanjin Montevideo near Long Beach breakwater - it allows the ship to enter the port, but prevents it from leaving. Ships in China, Singapore and Australia have been arrested.
Hanjin Scarlet was worked at Prince Rupert and awaits green light for Seattle call. Although $90.7 million was pledged to sweep up stranded containers, so far, $10 million was advanced by South Korean court, enough to discharge four U.S. West Coast ships, the Hanjin Gdynia, Hanjin Jungil, Hanjin Boston and Hanjin Greece., of which the Hanjin Greece completed its Long Beach discharge.
Awaiting $3.5 million payment to move 9,000 containers at U.S. ports for delivery to their final destinations.
 Hanjin Shipping's help desk will continue to operate throughout the Chuseok (Korean Thanksgiving) holiday Sept

13. 2016 Timeline — FEDERAL MARITIME COMMISSION
SEPT.
1,8
FMC issues statement regarding status of Hanjin collapse:
- The Federal Maritime Commission has no jurisdiction when it comes to resolving bankruptcy claims and does not intercede in legal actions between third parties that will be heard by the courts. 
- This is a legal matter and as such, it is important that affected parties, including shippers, consult with their attorneys on what remedies are available to them. 
- The Commission will be vigilant in watching for, and quick to act on, any improper behavior by other carriers and regulated parties (such as marine terminal operators, non-vessel-operating-common-carriers, and freight forwarders) that would constitute violations of the Shipping Act. 23:24
-The Commission is concerned about the operational and competitive impacts of Hanjin Shipping's status on the shipping industry broadly. Staff will be closely monitoring for the foreseeable future for any developments that might impact shipping markets. 20
FMC closed door staff briefing on 'Hanjin Shipping Bankruptcy and Shipping Disruptions',

14. What's Chapter 15 Of The U.S. Federal Bankruptcy Code?
ADDRESSES CROSS-BORDER INSOLVENCY CASES
EXCERPTS: Chapter 15 is a new chapter added to the Bankruptcy Code by the Bankruptcy Abuse Prevention and Consumer Protection Act of It is the U.S. domestic adoption of the Model Law on Cross-Border Insolvency promulgated by the United Nations Commission on International Trade Law ("UNCITRAL") in The U.S. interpretation must be coordinated with the interpretation given by other countries that have adopted it as internal law to promote a uniform and coordinated legal regime for cross-border insolvency cases.
Generally, a Chapter 15 case is ancillary to a primary proceeding brought in another country, typically the debtor's home country.
An ancillary case is commenced under Chapter 15 by a "foreign representative" filing a petition for recognition of a "foreign proceeding." 
The U.S. court is authorized to issue preliminary relief as soon as the petition for recognition is filed. 11 U.S.C. § 1519.
If a full bankruptcy case is initiated by a foreign representative (when there is a foreign main proceeding pending in another country), bankruptcy court jurisdiction is generally limited to the debtor's assets that are located in the United States. 11 U.S.C. § 1528. 
Immediately upon the recognition of a foreign main proceeding, the automatic stay and selected other provisions of the Bankruptcy Code take effect within the United States. 11 U.S.C. § 1520. 
The purpose of Chapter 15, and the Model Law on which it is based, is to provide effective mechanisms for dealing with insolvency cases involving debtors, assets, claimants, and other parties of interest involving more than one country. This general purpose is realized through five objectives specified in the statute:
(1) to promote cooperation between the United States courts and parties of interest and the courts and other competent authorities of foreign countries involved in cross-border insolvency cases;
(2) to establish greater legal certainty for trade and investment;
(3) to provide for the fair and efficient administration of cross-border insolvencies that protects the interests of all creditors and other interested entities, including the debtor;
(4) to afford protection and maximization of the value of the debtor's assets;
(5) to facilitate the rescue of financially troubled businesses, thereby protecting investment and preserving employment. 11 U.S.C. § 1501.
In addition, under chapter 15 a U.S. court may authorize a trustee or other entity (including an examiner) to act in a foreign country on behalf of a U.S. bankruptcy estate. 11 U.S.C. § 1505.
For more details/protocol:

15. Container Carrier Mergers & Acquisitions, 2014-present
As of September 6, 2016
M&A ACTIVITY
2016
• Hapag-Lloyd and United Arab Shipping Co. sign a business combination agreement with support of their stockholders on July 18. However, some contractual and regulatory approvals are still required prior to an anticipated year-end 2016 merger closing.
• CMA CGM Group acquires majority share of Neptune Orient Lines, (NOL) and its principal operating brand APL on June 9, and closes its voluntary general offer to remaining NOL stockholders on July 18. NOL becomes a wholly-owned subsidiary of CMA CGM Group following the completion of a compulsory acquisition process. NOL delists from the Singapore Stock Exchange on September 6.
• King Ocean acquires the services of Interocean Lines and Trinity Shipping Line on May 1. 
• Cosco and China Shipping officially restructure and merge as China Cosco Shipping Corp., effective Feb. 18.
2015
• Crowley Maritime completes the purchase of SeaFreight Line, SeaFreight Agencies, and SeaPack, liner and logistics companies serving Florida, the Caribbean and South and Central America on Nov. 2.
• Hamburg Süd acquires the container liner business of Compañía Chilena de Navegación Interoceánica S.A. (CCNI) upon closing on March 27, Hamburg Süd will continue the CCNI brand and operations in the west coast of South America trade with Asia, Europe and North America. 
• Pacific International Lines acquires Mariana Express Lines on March 11, 2015.
• Matson acquires Horizon Lines including its Alaska operations in late May 2015 upon the completion of the sale of Horizon's Hawaii operations to The Pasha Group. Separately, Horizon Lines terminated its Puerto Rico liner operations at year-end 2014
2014
• Saltchuck acquires Tropical Shipping from AGL Resources, which merged with Nicor in 2011.
• Baltic Reefers acquires NYKCool from NYK Reefers Ltd. The name changed to Cool Carriers AB; its 25 vessel fleet will remain independent. 
• The merger of Hapag-Lloyd with the container business activities of CSAV was completed Dec. 1 upon approvals from competition authorities. 
Source:

16. Hyundai Merchant Marine
TOP 10 CONTAINER CARRIERS IN U.S. TRADE
January-June 2016, ocean carrier percentage market share by laden TEUs
TOTAL TRADE
U.S. EXPORTS
U.S. IMPORTS 1
CMA CGM Group/APL
12.4%
MSC
13.0%
12.7% 2
12.1%
11.9%
11.6% 3
Maersk Line
9.2%
9.4%
9.0% 4
Hapag-Lloyd/CSAV Group*
7.2%
7.7%
China Cosco Shipping
7.6% 5
Evergreen Line
6.8%
5.8%
7.4% 6
6.1%
OOCL
4.7%
6.9% 7
Hanjin Shipping
NYK Line
4.4%
5.2% 8
4.5%
3.8%
4.3% 9
4.1%
3.7%
"K" Line 10
4.0%
Hamburg Sud Group/CCNI
3.5%
3.9%
#13
Hyundai Merchant Marine
3.2%
3.3%
#14
3.0%
*Not including UASC as the combination has not yet closed.
Source: PIERS, a sister product of The Journal of Commerce within IHS Markit,

17. ALPHALINER'S TOP 10 GLOBAL CONTAINER FLEET OPERATORS
As of September 1, 2016
Existing Cellular Fleet
Market
Total
Owned
Chartered
Rank
Global Fleet Operator*
% Share
TEU
Ships
% Chartered 1
Maersk Group
15.4%
3,193,142
622
1,761,256
263
1,431,886
359
44.8% 2
Mediterranean Shipping
13.4%
2,767,882
488
1,055,967
190
1,711,915
298
61.8% 3
CMA CGM Group/APL
10.9%
2,246,620
495
1,011,166
140
1,235,454
355
55.0% 4
China Cosco Shipping
7.4%
1,532,443
276
463,317 81
1,069,126
195
69.8% 5
Evergreen Line
4.6%
957,827
188
557,365
107
400,462
41.8% 6
Hapag-Lloyd/CSAV Group*
4.4%
916,850
163
506,011 70
410,839 93 7
Hanjin Shipping
2.9%
609,536 98
274,078 37
335,458 61 8
Hamburg Süd Group/CCNI
604,569
117
292,311 44
312,258 73
51.6% 9
Yang Ming Line
2.8%
582,039
105
203,810 43
378,229 62
65.0% 10
OOCL
574,512
100
397,531 53
176,981 47
30.8% 14
Hyundai Merchant Marine
2.1%
437,512 60
165,080 22
272,432 38
62.3%
Neither Hanjin nor Hyundai have current orderbooks.
NEWBUILDINGS to be delivered in 2016 stands at 2.4% of the existing global container fleet.
Source: Alphaliner,

18. ALPHALINER'S TOP 10 GLOBAL CONTAINER FLEET ORDERBOOKS
As of September 1, 2016
Order Rank
On Order TEU
On Order Ships
Orderbook as % of existing fleet
Existing fleet TEU
Existing fleet rank
Global Fleet Operator*
Average Ship Capacity On Order 1
China Cosco Shipping
560,888 35
16,025
36.6%
1,532,443 4 2
Mediterranean Shipping
401,063 30
13,369
14.5%
2,767,882 3
Maersk Group
387,150 29
13,350
12.1%
3,193,142
Evergreen Line
367,272 39
9,417
38.3%
957,827 5
CMA CGM Group/APL
235,624 24
9,818
10.5%
2,246,620 6
NYK Line
182,208 13
14,016
36.8%
494,824 7
PIL/Mariana Express
141,600 12
11,800
39.4%
359,611 16 8
OOCL
126,600
21,100
22.0%
574,512 10 9
MOL
120,900
20,150
23.2%
521,984
Yang Ming Line
98,396
14,057
16.9%
582,039
Neither Hanjin nor Hyundai have current orderbooks.
NEWBUILDINGS to be delivered in 2016 stands at 2.4% of the existing global container fleet.
Source: Alphaliner,

19. SCFI — SHANGHAI CONTAINERIZED FREIGHT INDEX
To U.S. WEST COAST base ports*
14.8 PERCENT ABOVE YEAR-END 2015: The September 14, 2016 U.S. West Coast base port average spot rate was $1,742 per FEU, $7 or 0.4 percent below the previous week, although $363 or 26.3 percent above a year ago, and $224 or 14.8 percent above year-end This index was nearly 2.5 times its record low $725 of April 22, 2016, and $311 or 21.7 percent above its Oct. 16, 2009 base rate of $1,431 per FEU. $
CURRENT
9/14/2016
$1,742
HIGH
7/2/2010
$ 2,833
BASE
10/16/2009
$ 1,431
LOW
4/22/2016 $
Base ports defined: U.S. West Coast — Los Angeles/Long Beach/Oakland; U.S. East Coast — New York/Savannah/Norfolk/Charleston.
The freight rate includes ocean freight and surcharges including BAF/FAF/LSS*, EBS/EBA, CAF/YAS, PSS, WRS, PCS, SCS/SCF/PTF/PCC.
*Low Sulphur Surcharge (LSS) was included from year-end 2014.
January 1, 2010-September 14, 2016
Source: Shanghai Shipping Exchange, www1.chineseshipping.com.cn/en/indices/scfinew.jsp
Mid-Autumn Festival: September 15-16, 2016.

20. SCFI — SHANGHAI CONTAINERIZED FREIGHT INDEX
To U.S. EAST COAST base ports*
4.2 PERCENT BELOW YEAR-END 2015: The September 14, 2016 East Coast base port average spot rate was $2,447 per FEU, sequentially flat, while up $20 or 0.8 percent year-over-year. This level reflects a $999 or 69 percent jump from its record low $1,448 per FEU of Dec. 25, although $114 or 4.5 percent below year-end 2015 spike. The index was $8 or 0.3 percent above its Oct. 16, 2009 base rate of $2,439 per FEU.
$ CURRENT
9/14/2016
$2,447
HIGH
2/13/2015
$5,049
BASE
10/16/2009
$2,439
LOW
12/25/2015
$1,448
Base ports defined: U.S. West Coast — Los Angeles/Long Beach/Oakland; U.S. East Coast — New York/Savannah/Norfolk/Charleston.
The freight rate includes ocean freight and surcharges including BAF/FAF/LSS*, EBS/EBA, CAF/YAS, PSS, WRS, PCS, SCS/SCF/PTF/PCC.
*Low Sulphur Surcharge (LSS) was included from year-end 2014.
January 1, 2010-September 14, 2016
Source: Shanghai Shipping Exchange, www1.chineseshipping.com.cn/en/indices/scfinew.jsp
Mid-Autumn Festival: September 15-16, 2016.

21. SCFI — SHANGHAI CONTAINERIZED FREIGHT INDEX
To NORTH EUROPE base ports*
21.6 PERCENT BELOW YEAR-END 2015: The September 14, 2016 North Europe base port average spot rate was $966 per TEU, $23 or 2.4 percent above the week before, and $510 or more than double from a year ago. While this level was more than four times above its record low $205 per TEU level of June 19, 2015, matched March 18, 2016; it was $266 or 21.6 percent below both its year-end 2015 results, and its Oct. 16, 2009 base rate of $1,232 per TEU. $
CURRENT
9/14/2016
$966
HIGH
3/5/2010
$2,164
BASE
10/16/2009
$1,232
LOW
6/19/2015, 3/18/2016
$205
Base ports defined: North Europe — Hamburg/Antwerp/Felixstowe/Le Havre; North Mediterranean Sea — Barcelona/Valencia/Genoa/Naples.
The freight rate includes ocean freight and surcharges including BAF/FAF/LSS*, EBS/EBA, CAF/YAS, PSS, WRS, PCS, SCS/SCF/PTF/PCC.
*Low Sulphur Surcharge (LSS) was included from year-end 2014.
January 1, 2010-September 14, 2016
Source: Shanghai Shipping Exchange, www1.chineseshipping.com.cn/en/indices/scfinew.jsp
Mid-Autumn Festival: September 15-16, 2016.

22. SCFI — SHANGHAI CONTAINERIZED FREIGHT INDEX
To NORTH MEDITERRANEAN base ports*
31.6 PERCENT BELOW YEAR-END 2015: The September 14, 2016 North Mediterranean base port average spot rate was $860 per TEU, sequentially spiking $158 or 22.5 percent, and spiking $412, or nearly doubling year-over-year. While this level was $665 more than the record low $195 per TEU of October 16, 2015, matched March 18, 2016; it was $397 or 31.6 percent below year-end, and $419 or 32.8 percent below its Oct. 16, 2009 base rate of $1,279 per TEU. $
CURRENT
9/14/2016
$860
HIGH
2/26/2010
$2,067
BASE
10/16/2009
$1,279
LOW
10/16/2015, 3/18/2016
$195
Base ports defined: North Europe — Hamburg/Antwerp/Felixstowe/Le Havre; North Mediterranean Sea — Barcelona/Valencia/Genoa/Naples.
The freight rate includes ocean freight and surcharges including BAF/FAF/LSS*, EBS/EBA, CAF/YAS, PSS, WRS, PCS, SCS/SCF/PTF/PCC.
*Low Sulphur Surcharge (LSS) was included from year-end 2014.
January 1, 2010-September 14, 2016
Source: Shanghai Shipping Exchange, www1.chineseshipping.com.cn/en/indices/scfinew.jsp
Mid-Autumn Festival: September 15-16, 2016.

23. HANJIN SHIPPING: CARGO & VESSEL INFORMATION
HANJIN TRACING – B/L, Container #
 1. Access to the Website (
 2. Move to "e-Service" clicking the image
 3. Click "Track & Trace > Cargo Tracking" on the lower part of screen
4. Input B/L No.(Carrier's B/L) or Container No. and search. 
     
HANJIN HELP DESK
America
China RHQ      
Europe          
Japan
South East Asia  ~9
HANJIN OPERATING VESSEL STATUS
At Hanjin.com, click on News, Customer Advisory and download report: Operating_Vessel_status (select most current date) All Hanjin Ships shown here.

24. Thank you for reading The Journal of Commerce!
Marsha Salisbury
 Research Editor, The Journal of Commerce | Maritime & Trade
 2 Penn Plaza East, 12th Floor | Newark, NJ  T:   C:
LinkedIn: Marsha Salisbury
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