Winnipeg, Sept. 9 (CNS Canada) – The bankruptcy of a major Korean shipping company has raised some concerns for Canadian pulse crops moving by container, but any disruptions to movement will likely be minor, according to an industry analyst.
Hanjin Shipping Co., the world’s seventh-largest container shipping company, declared bankruptcy on August 31, leaving more than half of its 141 vessel fleet and roughly US$14 billion worth of cargo stranded at sea. Canadian pulse and special crops often move by container, and some shipments are likely tied up by the bankruptcy proceedings.
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While the timing of Hanjin’s bankruptcy right before Canada’s new crop shipments begin in earnest likely limited the impact on pulse movement, there will still be some short-term pain for those exporters caught up in the situation, said Chuck Penner, of LeftField Commodity Research.
A large portion of the world’s container shipping capacity is now caught up by the bankruptcy proceedings, which is expected to lead to an increase in shipping rates. At the same time, Canada is anticipating a large pulse export program, which may lead to “a short-term blip” in rates as exporters need to make alternate arrangements, said Penner.
However, “once the bankruptcy proceedings are sorted out, those ships and containers don’t evaporate; they’ll be bought by someone else at a lower price,” said Penner. “That capacity is tied up for now in these bankruptcy proceedings, but won’t go away in the long term.”
