News / Post-Hanjin, contingency planning 'is a must, not an option' to avoid chaos

As the industry begins to learn lessons from the demise of Hanjin, it is clear that the location of containers will be the priority for forwarders and shippers seeking to mitigate the effect of future collapses.

A recent critique from Damco emphasises visibility in the supply chain and that contingency planning is “no longer an option, but a must”.

Damco, recently merged into Maersk’s new Transport & Logistics division, had containers on 40-50 Hanjin-operated vessels around the world when the South Korean carrier entered into court receivership on 31 August.

It said: “The Hanjin experience points to some wider lessons for supply chains. First the importance of visibility: supply chain disruption, in all its forms from natural disasters to geopolitics, is increasing rather than decreasing and shippers need to be paying more attention to risk.

“Second, the Hanjin collapse should trigger significant change in the way companies approach the procurement of shipping and carrier services. Now that we know that no carrier is ‘too big to fail’, with higher risk, contingency planning is no longer an option, but a must,” it said.

Shortly after Hanjin’s bankruptcy the Korean Shippers Association revealed that the majority of its members had no idea where their goods were – a fact that some in the business of providing visibility to shippers greeted with incredulity.

Boris Felgendreher, director of marketing for the EMEA region at GT Nexus, told The Loadstar: “The technology not only exists, but is becoming increasingly widely used. All the shippers that use our platform knew exactly where their boxes were when this happened – and that is not just the container, but is goes right down to the SKU [stock keeping unit] level of items in each box.”

GT Nexus estimates that around 34,000 boxes recorded in its system in the first week of September were on Hanjin vessels, although Mr Felgendreher admitted that data on the actual location of the vessels remained opaque in early September.

Similarly, Damco described the initial information from Hanjin on its containers’ status as “minimal”, and had to quickly establish a task force of a dozen experts from different fields, which convened twice a day to evaluate developments.

Although data from Damco’s own systems revealed where its boxes “were supposed to be”, the complexity of the disruption was “considerable”, and it took the team – along with information gleamed from different sources – some two weeks to ascertain the whereabouts of all of its bookings.

This ranged from goods in Hanjin containers on stranded ships unable to berth for fear of arrest, to ships making for ports miles from their bill of lading destination.

Damco also discovered that some containers were being detained at ports of departure, arrival or transhipment by Hanjin creditors endeavouring to exercise a lien for monies owed.

There were also containers booked by Damco with other carriers but stranded on Hanjin ships all around the world, which were similarly impacted.

Damco said although some of its customers had been able to wait for their goods, it added that others may face factory shut downs if parts do not arrive soon.

“Sadly, for some customers our best efforts are too late.”

It added: “The Hanjin collapse happened at the beginning of the big seasonal build-up to Thanksgiving and Christmas. Some customers have had to cancel October promotions for their goods, losing not only sales, but the money invested in TV commercials and other marketing.”