The collapse of Hanjin Shipping was a bungle of the first order by the South Korean government, according to Tan Hua Joo, an analyst at Alphaliner.
Speaking at the Asian Logistics and Maritime Conference on Monday in Hong Kong, he said that the government should have done away with Hyundai Merchant Marine (HMM) instead.
He called the collapse of Hanjin’s “political blundering taking place over economic sense”. Hanjin was a stronger company than HMM with a foot in THE Alliance, Tan said, whereas HMM has yet to officially join any liner alliance, and recently missed out on joining 2M. “Ego prevailed over common sense,” Tan said.
He did not think that another major bankruptcy for the container market was likely in the near term, but warned that the chase for market share was the single biggest current threat to the container sector. He noted that the top 10 carriers would control nearly three quarters of containerships by the end of next year.
In addition, the gap between the top seven players – including the soon to be merged trio of Japanese liners – and the rest will pose a significant challenge for medium sized companies to run effectively in the future, Tan argued.
Between this quarter and the end of 2017 there are 114 ships of 9,000 teu plus – just under 1.6m teu – coming out of shipyards in Asia, adding 5% net growth to an already over-capacitized sector.
Maersk China chairman Tim Smith tried to strike a note of optimism. “The unprecedented wave of consolidation,” Smith said, “may give a platform for a more stable future”, he said.