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Shipping industry braces for more challenges ahead following Hanjin collapse

EXPERTS expect the fallout from the collapse of Hanjin Shipping is far from over, already having delayed shipments to retailers and leaving shippers and handlers uncertain of payment.

Shipping industry braces for more challenges ahead following Hanjin collapse

EXPERTS expect the fallout from the collapse of Hanjin Shipping is far from over, already having delayed shipments to retailers and leaving shippers and handlers uncertain of payment.

Shipping industry braces for more challenges ahead following Hanjin collapse
22 September 2016 - 20:35

Shipping industry braces for more challenges ahead following Hanjin collapse
EXPERTS expect the fallout from the collapse of Hanjin Shipping is far from over, already having delayed shipments to retailers and leaving shippers and handlers uncertain of payment.
"It's not over," executive director of the port of Long Beach, Jon Slangerup, told a supply chain Conference at the University of Southern California last week. "I think there will be continual consolidation and strengthening of the entire ocean liner business."
To survive the slump in container shipping, major carriers have been forced to merge or build alliances with rivals. This year alone China Shipping Group Co and China Ocean Shipping Co are in the midst of a complex merger.
Hanjin's bankruptcy was a just a very public signal of a deepening cargo crisis, say experts and industry analysts. Shipping companies are anticipated to lose US$5 billion this year, reported Long Beach Press Telegram.
Operators of major ports also can expect a sea change, too, experts say.
"With the consolidation of industry, the ports haven't made any money," said director of financial research at Drewry Maritime Research, Rahul Kapoor, "and there will be increasing pressure on terminals."
If the current crisis results in fewer lines, the business rivalry could intensify among ports. 
"They don't know who is going to be the winner," said Pacific Merchant Shipping Association vice president Michelle Grubbs. 
"The industry is going through a major restructuring in order to become profitable," she said.
Given that terminal operators are often affiliated with shipping lines - or have a direct interest - the mergers could benefit one port over another.
But not everyone is worried. Regardless of the names on the ships, they will keep coming in, said port of Los Angeles executive director Gene Seroka. And so will the cargo and the revenue they bring. "You are still going to have the same amount of cargo coming through and if we are doing our jobs, we will grow," Mr Seroka said. 

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