Cargo owners in flight to safety after Hanjin collapse, shipping lines say
By Brenda Goh and Faith Hung
SHANGHAI/TAIPEI (Reuters) - Cargo owners are becoming more concerned about risks and are shifting their business to shipping lines deemed more financially stable after the collapse of South Korea's Hanjin Shipping Co Ltd 117930.KS, top shipping executives said.
Robbert van Trooijen, Asia Pacific chief executive of AP Moeller-Maersk's (MAERSKb.CO: Quote) container shipping arm, said the company was seeing a "flight to safe havens" after the August collapse of Hanjin left $14 billion of cargo stranded at sea.
"It reminded the customer of the financial situation of many of the carriers in the trade," he told Reuters via a telephone interview on Monday, adding most firms' financial stability was "not great."
"We've seen that the debate around the viability of the supplier is a more important element in the contracting decision... A lot of customers are looking at the more stable shipping lines to contract their cargo with," he said.
Hanjin became the biggest casualty of the shipping industry's worst ever downturn, which started after the 2008 global financial crisis as an excess of ship capacity and slowing trade dragged down freight rates.
Maersk's comments were echoed by Taiwanese rival Evergreen Marine Corp 2603.TW which also told Reuters last week it had recently provided relevant information to large U.S. companies to assure them of its financial health.
"They are making additional efforts to check shipping firms' financial status. The most important thing for us is to assure our customers. We have the support of our parent company, Evergreen Group," said the shipping line's spokesman Golden Kou.
To survive, multiple shipping lines have embarked on mega-mergers or teamed up with rivals, the latest being Japan's top three carriers who announced last week that they would merge operations to create the world's sixth-largest fleet. Continued...