You probably seen the commotion of HanJin a few weeks/months back…
How it affects us and how the future of it will look like
“A Big Nightmare” – Channel News Asia (Logistically)
Imagine you (SmallMediumEnterprise) have placed an order to shipped products/equipments or worst perishables from another country and you have decided to use HanJin for its competitive pricing. Now it’s stuck/lost/stolen… what can you do?? Go down to their singapore branch…”I went to their office almost every day but all they say is: ‘We don’t know when your vessel can come in’,” the contractor recounted. “It was a disaster.”…….. what else??? you need to hand over $5,000 deposit upfront before collecting your container.. if it is even in singapore.. or else you would be like the rest trying to get your vessel to here (Singapore) which you have to file a civil claim first.
- 14 Billions worth of goods are floating in the ocean
- Porting cost lead to Ships unable to berth
Economical short-term instability
The maritime industry makes up of 7% of Singapore’s GDP (20.5 Billion)
- The drop in oil price is the will increase the oversupply of vessels
- Off-shores companies are downsizing in Malaysia and Singapore (Is in Crisis) – Worst in 25 years of history
- Sembcrop marine are under financial trouble too
- Requires a 1-2bn Contract to maintain quarter earnings
- Slashing 8,000 Employees
- Singapore Keppel-Corp announce slashing of 8,000 employees and Pay-cuts
- Ezion Holdings has 31.5% fall in Q2 net profit and 62.2% in Q1
In current time, the shipping and offshore industry looks really bleak. Most of the 3 companies mention above are heading to 2008 stock pricing, this means market are really at a bad time.
As I’m not predictor of the sun, but a person who relies on facts and numbers, Market would have to take a beating for at least 1-2 years before rising back up…. Especially with the poor economical structure the world is changing into..
– if you’re interested-
- The port cost of Hanjin has been covered by Korean Airlines
- Bailing out is on track as Korean Government is lending money to them
- With a new finance minster of Korea and a huge scandal of the previous one
- What is the next best step for korea?