Korean liner operators under severe stress

29/08/2013

According to Drewry Maritime Equity Research, Korean container shipping companies have their backs against the wall with mounting debt and piling losses. Both HMM and Hanjin have severely strained their balance sheets in the current industry downturn and the near term outlook doesn’t seem benign.

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Michael Kusuplos
August 29, 2013 at 4:01 pm
This situation with Korean Carriers reminds one of the words of Maersk McKinney Moller ” too many wheelbarrows and not enough dirt to fill them”.

Typical of many industrial booms and busts that the world has experienced over the years. Now, these carriers seek relief from the problems that they have brought upon themselves by over expansion of their fleets which brought along the debt to their balance sheets.

Are they too big to fail? The companies may go or be resized but, the ships, the assets, will remain. Why not allow the forces of the marketplace take over? This is what happens, with the exception of banks, to occur in other businesses that have made the same mistake caused by their own management that took the original risk in the first place. Look at the more prudent carriers such as Evergreen that did a very good at looking forward to the risk that over expansion could bring to them.

The mindset in any business, should be it’s ok to miss a ship, but never board one that has a great risk to sink!

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Martyn Benson
August 31, 2013 at 1:03 pm
Sadly, HMM and Hanjin have been limping along with cash-flow issues for several years – even before the financial crisis. These remarks by Drewry are just an accumulation and legacy to poor management and over optimistic ambition.

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