Obituary: Hanjin Shipping
Hanjin Shipping, a global container carrier of note, was born in 1977 and passed away on 17 February 2017, a few years earlier than expected and much longer than it financially deserved.
A proud son of the Hanjin Group, it had a promising future in navigating the harsh waters of an industry that requires significant up-front investments and industry know-how to compete successfully. Since its birth, the company has carefully weaved its way through industry conferences, some questionable strategic partnerships, cases of tax evasion, and suspicions of collusions, while maintaining an independent focus on family priorities ahead of corporate profits.
At a young age, Hanjin Shipping quickly became a model example of Asian entrepreneurialism, ambitiously spreading its feeder experience into the mainline transpacific and transatlantic operations, combined with a youthful attitude towards the total costs of operating extensive networks anchored by one ambitious, but small export economy feeding about 70 shipping companies.
By a quirk of a small part of its DNA, being owned by a US-born father, it was spared the pre-arranged marriage strongly recommended by the Shipping Industry Rationalization Policy. Emboldened by its luck at such a young age, it decided to generously spread its shrinking fortunes on foreign terminals and bankrupt shipping lines. The banks happily bankrolled the young prodigy of the Hanjin family in the belief that should their offspring ever overspend, the parents will easily and happily bail it out.
Hanjin Shipping's qualities included a wavering business strategy of entering and exiting conference alliances, leaving its friends and enemies in a constant state of guessing. This youthful devil-may-care attitude was combined with an unfettered belief that commoditisation would never affect its status with customers, who would continue to happily pay high shipping rates no matter how attractive competitors' offers might be. Whenever the creditors were knocking on its doors, the company paid generously with IOUs and cosmetic changes to the network operations to the surprise of industry watchers and innocent bystanders.
With Hanjin Shipping sinking, the company will be missed for ignoring the dark clouds of commoditisation and disruptive actions taken by its competitors. Its passing should serve as a cautionary tale for its peers and customers alike.