Hanjin Shipping seeks creditor protection

[Colin May]

http://www.wsj.com/articles/hanjin-s...ors-1472683164

" South Korea’s Hanjin Shipping Co., one of the world’s largest shipping lines, stopped taking new cargo and U.S. ports began turning away its ships after it filed for bankruptcy protection on Wednesday.

The move, coming at a critical time for U.S. retailers stocking up for the holidays, roiled global trade and caused U.S. shippers to brace for steep rate increases on routes to and from Asia."
Freight rates have moved sharply higher.
This was inevitable, stalled world economy and too much capacity.

[Ziobrop]

most of the major lines are hurting.
threes still lots of boxes being moved, but larger ships drive rates down, since the cost per box decreases. this leads to other lines cutting rates, so as not to loose business, and be worse off.

Besides the cost cutting, Lines have invested heavily in newer larger ships, that they now have to pay for. So they have low rates and high debt.

Rates increasing, and one fewer competitor should help things.

Its also worth noting this cycle occurs periodically in container shipping, basically since it was invented.

build bigger ship, under cut competitors, they build bigger ships, lower rates. everyone looses money.. until correction.