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Sept.19. 2016

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4 THE JOURNAL OF COMMERCE Editor's Letter Chris Brooks SOMETIMES A PICTURE , a caption and a headline can tell the story. A nd sometimes they just plead for context that opens the door to deeper questions. So it is here, where hundreds of shipping interests rallied to the defense of beleag uered Ha njin Shipping on Aug. 31, a day after the Korean ocean carrier filed for court receivership when its credi- tors pulled the plug on additional fi nancial support — in essence recog- nizing what many saw as inevitable long before. One can't help but wonder about the makeup of those rushing to Hanjin's defense — those with a vested interest, of course: port and terminal operators, and others to whom the carrier owed money, including, per- haps, some of Hanjin's partners in the CKYHE Alliance and those in other slot-sharing arrangements. But where, other than those creditors who repeatedly extended funding to prop up a company whose fi nancial losses since 2011 measured in the billions, was that support before Aug. 31? In hindsight, there was little or none, because cargo interests had largely distanced themselves from any long-term relationship with Hanjin, according to sources who, as far back as last spring, said few, if any, BCOs were signing service contracts with the Korean carrier because of the very risk a potential collapse posed. Unfortunately, that offered no protection for those BCOs who signed with other carriers in the CK Y HE Alliance — Cosco, "K" Line, Yang Ming, and Evergreen — and whose cargo moved on Hanjin ships that are now hamstrung in legal limbo. For ot her o ce a n c a r r ier s , Hanjin's demise might just be the event that tilts the playing fi eld back in their favor for the fi rst time since 2010. The response was immediate and stark: A September general rate increase in the eastbound trans- Pacific not only held, but took the spot market up by nearly 45 percent to the East Coast and more than 50 percent to the West Coast — and other GRIs and surcharges stand a better chance of holding up than any in recent memory. For shippers, however, the tim- ing couldn't be worse, coming as the peak shipping season gets rolling and as holiday goods leave Asia for the US, Europe and elsewhere. Perhaps in time, the space crunch BCOs are feeling now will ease as ocean car- riers redeploy some of the 1 million TEUs in estimated idle capacity. Until then — and maybe beyond, if carriers manage this situation to their maximum benefi t — ship- pers have lost the advantage they've had for so long. Ironically, it took a carrier collapse for that to hap- pen. For carriers, then, the path to recovery actually may start with failure . JOC Rising From the Ashes The Journal of Commerce (USPS 279 – 060), ISSN 1530-7557, September 19, 2016, Volume 17, Issue No. 19. The Journal of Commerce is published bi-weekly except the last week in December (printed 26 times per year) by JOC Group Inc. 2 Penn Plaza East, 12th Floor, Newark, N.J. 07105. Subscription price: $344 a year. Periodicals postage paid at Newark, N.J., and additional mailing offi ces. © All rights reserved. No portion of this publication may be copied or reprinted without written permission from the publisher. POSTMASTER: Please send address changes to The Journal of Commerce, Subscription Services Department, 2 Penn Plaza East, Floor 12, Newark, N.J. 07105-2257. SEPTEMBER 19.2016 EXECUTIVE EDITOR, THE JOURNAL OF COMMERCE AND JOC EVENTS Chris Brooks 973 776 7818 MANAGING EDITOR Barbara Wyker 973 776 7817 EXECUTIVE EDITOR, JOC.COM Mark Szakonyi 202 872 1234 SENIOR EDITORS Joseph Bonney, Breakbulk/Project Cargo, Gulf Coast 973 508 2417 William B. Cassidy, Trucking and Domestic Transportation 202 872 1228 Bill Mongelluzzo, West Coast 562 428 5999 Hugh Morley, Northeast, Mexico 973 776 7811 Greg Knowler, Asia Editor, IHS Maritime & Trade +852 3975 2647 Turloch Mooney, Global Ports, IHS Maritime & Trade +852 9011 9109 ASSOCIATE EDITOR Reynolds Hutchins, Intermodal, Government/Regulation, Southeast Ports 202 572 1487 RESEARCH EDITOR Marsha Salisbury 973 776 7828 ASSISTANT WEB EDITOR Dustin Braden 973 776 8652 ECONOMIST Mario O. Moreno 973 776 7850 SENIOR CONTENT EDITOR Alessandra Gregory Barrett 860 248 5238 SENIOR DESIGNER Sue Abt, 973 776 7825 DESIGNER Bryan Boyd, 973 776 7827 PUBLISHER Tony Stein 770 295 8809, SALES Cindy Cronin, Strategic Account Manager Southeast, Gulf, Canada sales, 954 551 8305 Zachary Gorman, Account Executive Northeast sales, Classifi eds/Reprints/Copyrights 973 776 7820 Misty Belser, Senior Sales Executive 919 869 7404 Ria Van den Bogaert, Sales Representative Europe, Middle East sales, +32 2 569 8905 Bon Kwok, Sales Representative Asia sales, +852 31707373 For Magazine Subscription Customer Service: 2 Penn Plaza East, 12th Floor, Newark, N.J. 07105 973 776 8660 • 800 952 3839 MANAGING DIRECTOR, MEDIA AND EVENTS, IHS MARITIME & TRADE, Rhiannon James SENIOR DIRECTOR, CONTENT, IHS MARITIME & TRADE, Peter Tirschwell DIRECTOR, JOC AND RAILRESOURCE, IHS MARITIME & TRADE, Amy Middlebrook MANAGER, PRODUCTION, Carmen Verenna MARKETING PROGRAMS MANAGER, PIERS AND JOC, Jesse Case ©2016 The Journal of Commerce — All Rights Reserved For more information, visit our website, Offi cials from shipping-related organizations rallied in Busan on Aug. 31 to plead with the government and creditors to map out measures to save fi nancially strapped Hanjin. The pleas fell on deaf ears as creditors declined to provide additional support, sending the South Korean carrier into bankruptcy. Photo: Yonhan News/YNA/Newscom

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