Hanjin Shipping (Container Operations)


Hanjin was formed in 1977, and in 1988 merged with Korea Shipping Corporation, becoming Hanjin Shipping Company. Until 2009 the company was part of the Hanjin Group, and has several subsidiaries, including Keoyang Shipping. Hanjin's former German subsidiary Senator Lines discontinued its services in February 2009, as a result of deteriorating market conditions.

In September 2009 Hanjin Shipping Company split into two separate companies: Hanjin Shipping, which retained control of the group's core shipping businesses and terminal operations; and Hanjin Shipping Holdings, which manages the subsidiary operations including logistics and ship management.

The company is South Korea's largest shipping line and has diversified into the dry bulk and liquid bulk shipping markets. It also has a terminal unit, Hanjin Pacific, which complements the carrier's box operations and boasts 12 dedicated terminals. These include facilities at Long Beach, Tokyo, Kaohsiung, Busan and Cai Mep. The division is planning to open a new facility in Jacksonville.

The company has three regional headquarters, 200 offices and 30 local corporations.

In 2001 the CKYH Alliance was formed, with Hanjin joining COSCO, 'K' Line and Yang Ming to share capacity on key trade lanes. The alliance enables Hanjin to offer a broader coverage and express services. It also plans to jointly develop new terminals. In 2011, with the trend for alliances increasing, the CKYH Alliance agreed to form a partnership with Taiwan's Evergreen Line. The CKYH Alliance's link-up with Evergreen came into force in Q212 and is likely to see the carriers operating a 12 loop service using between 96 and 132 vessels. The lines have at their disposal 14 vessels of over 10,000 twenty-foot equivalent units (TEUs).

SWOT Analysis


  • The company is part of the world's biggest shipping alliance - the CKYH Alliance - which it formed with COSCO, 'K' Line and Yang Ming. Cooperation on key long-haul trade lanes minimises costs and means rapid adjustments may be made in the case of market volatility.

  • The line has considerable exposure to intra-Asia trade and continues to increase its services in the region.

  • The line was one of the first to offer Vietnam as a port of call on an Asia-Europe service. Hanjin Shipping's Vietnam-focused strategy is also evident in its operation of the Cai Mep container terminal.

  • The company has diversified operations, operating in the dry and liquid bulk sectors and boasting a terminal unit.


  • Despite a diversified route portfolio, the company is heavily exposed to the transpacific trade route. The route accounted for 42.2% of box volumes shipped in 2010, leaving the company at risk if volumes on the route decline.

  • Hanjin Shipping has a large order book, with an additional 178,444TEUs of capacity awaiting delivery, equivalent to 31.0% of the company's current fleet.

  • The company made a loss of US$732.78mn in 2011.


  • Recent expansion into more niche, potentially high-growth regions - notably Vietnam and Latin America - may prove lucrative.


  • Container lines still face the problem of overcapacity in 2013, which is likely to lead to rate declines, placing further pressure on carriers' bottom lines.

  • The company is taking on a fleet of mega-vessels during a period of decreasing demand on the Asia-Europe trade route.

  • Construction of Hanjin's Jacksonville terminal will be stalled until a decision is reached on whether the harbour will be dredged, which will take until 2014 at the earliest.


Hanjin Shipping has gained a place since the previous quarter, and was on December 17 2012 the seventh-largest container-shipping company in the world, with a market share of 3.4% (down from 3.5% in October 2012). It is 61,852TEUs behind sixth-placed Hapag-Lloyd and 2,907TEUs ahead of APL.


Hanjin Shipping has a highly diversified route portfolio, operating on both the 'big money' markets of the transpacific and the Asia-Europe routes, as well as the potentially high-growth route of intra-Asia. The line is most heavily exposed to the tranpacific, on which the carrier operates 13 services. On the Asia-Europe trade route Hanjin Shipping operates six services, and a further 17 on intra-Asia.

In terms of volumes handled, the transpacific route dominates Hanjin Shipping's services, accounting for 42.2% of total box volumes in 2011 with 1.76mn TEUs handled. Asia-Europe accounted for 31.7% of the total shipped in 2011, with 1.3mn TEUs carried on the route that year. Intra-Asia services carried a total of 918,083TEUs in 2011, accounting for 22% of the total volumes handled worldwide.

BMI believes that, owing to the company's base in South Korea, it is well placed to expand its coverage of intra-Asia, which is widely considered to be the medium-term growth driver for the container shipping sector. BMI notes that in the space of just a year, intra-Asia is playing a greater role in Hanjin Shipping's box operations. In 2010 volumes carried on the company's intra-Asia services accounted for 15.6% of the total; in 2011 this had increased to 22%.


Hanjin Shipping has a fleet of 109 ships with a total capacity of 572,234TEUs as of December 17 2012, according to AXS Alphaliner. The line has a good balance between chartered-in vessels - which account for 52.5% of the fleet - and its owned ships; these number 42. This enables Hanjin to downsize in the event of a downturn and return chartered vessels to their owners when their charters expire. Lines with a high ownership ratio would be forced to lay up vessels in this situation and therefore lose money.

Until now the vessels owned by Hanjin Shipping have been smaller in size than some of the ships it has chartered. The owned fleet is heavily weighted toward vessels of 4,000-5,000TEUs. The line owns 16 of these vessels, the smallest of which are 4,024TEUs. Hanjin owns seven vessels with capacity between 5,000TEUs and 6,000TEUs, and a fleet of eight 6,655TEU ships. There are 10 vessels in Hanjin's fleet with a capacity of between 8,586TEUs and 9,954TEUs.

In June 2011 Hanjin announced the purchase of five mega-vessels of 13,000TEU capacity for US$846mn, the first of which - the 13,102TEU Hanjin Sooho - was delivered in early 2012. The order was originally placed by a company that intended to charter the vessels to Hanjin, but the liner will now take direct ownership of the vessels. These ships will join Hanjin's fleet on its Asia-Europe services.

Financial Results


Positive Container Operations In Q312: In the quarter ended September 30 Hanjin's container-shipping division recorded its second profitable quarter of the year. Given the bleak times the container-shipping sector has been going through in recent years, this is a positive. An operating profit of KRW84.5bn was achieved through 'active rate restoration efforts on Trans-Pacific and Asia-Europe trades, peak-season shipment volume increase and continuous cost reduction efforts'. Total operating profit for Hanjn, taking into account its bulk business, was KRW96.8bn.

Hanjin Announces Net Loss Of KRW1.2bn In Q212: Hanjin announced a net loss of KRW1.2bn (US$1.06mn) in Q212. Although this was the company's third successive quarterly loss, it was significantly better than the KRW274bn (US$238mn) loss posted in Q411 and the KRW338.4bn (US$299.8mn) loss posted in Q112. Hanjin Shipping Company reported overall revenue of KRW2.83trn (US$2.457bn) in Q212. The company attributed its improved performance to a rise in both container freight rates and volumes.


Despite boosting its box shipping volumes by 12.4% in 2011 to 4.2mn TEUs, Hanjin Shipping's container operations saw revenue drop by 2.6% y-o-y to US$6.6bn. The fall was attributed to the declining freight rates which plagued the industry in 2011. The company's loss on the back of this revenue decline, coupled with increasing operating costs as the cost of bunker fuel rose over the year, led the company to record a net loss of US$732.78mn, compared to a US$257.61mn net profit in 2010.


Revenue at Hanjin Shipping's container operations increased by 52.4% y-o-y to US$6.75bn in 2010, compared with US$4.4bn in 2009. The increase enabled Hanjin Shipping to return to the black, with a full-year operating profit of US$532mn. This came after the shipping line's container operations posted a loss of US$652mn in 2009.

The recovery in revenue was driven by the global uptick in both volumes and demand in the container shipping sector. In terms of total volumes carried, Hanjin Shipping's box levels increased by 15%. A major driver of this increase was intra-Asia, where volumes increased by 30.7% y-o-y. Volumes on the line's transpacific services were also a factor, with a y-o-y increase of 17.55%.

The major driver of Hanjin Shipping's recovery, however, was the company's ability to increase rates. Rates grew by 69.9% y-o-y, with Asia-Europe seeing a 52% increase y-o-y. It was followed by the transpacific, where revenue increased by 33%. Revenue from the carrier's Asia-Europe services and transpacific lines increased y-o-y by 84.5% and 61.3% respectively. The rate increases on the intra-Asia route were the major driver behind the recovery, increasing by 88.45% y-o-y.

However, it was not simply the uptick in volumes and rates that enabled Hanjin Shipping to improve its financial position. It has continued its strategy of slow-steaming, ensuring a saving on bunker fuel costs. BMI expects this strategy to continue as demand for express services has not yet materialised.

Latest Activity

Hanjin Details Shipping Rate Increase Proposals

Hanjin was set to increase rates across its Asia-Europe trade routes from January 13, 2013, with the increase set at US$350 per 20-foot (ft) unit and US$700 per 40-ft unit. The company attributed the move to a need to mitigate the impact of declining freight rates.

Hanjin To Launch West Australia Service

Hanjin has unveiled plans to expand the scope of its operations in West Australia. The expansion will see the launch of a new service, dubbed the West Australia Express, which is scheduled to begin commercial operations from January 2013.

Hanjin, Neptune Announce New Japan-Thailand Route

Singaporean shipping firm Neptune Orient Lines has confirmed that it is to participate in the establishment of a new line connecting Japan to Thailand. The new intra-Asian route is being set up in collaboration with Hanjin, and is known as Japan Thailand 2.

Asia Australia Discussion Agreement Members To Adjust Bunker Charges

The members of the Asia Australia Discussion Agreement announced in December that they would adjust bunker charges for shipments from China, Hong Kong, Japan, South Korea and Taiwan from January 5 2013. Charges will be adjusted to US$575 per TEU and US$1,150 per FEU for both dry and refrigerated containers. The members of the AADA include ANL, CSCL, Cosco, Hamburg Sud, Hanjin Shipping, Hapag-Lloyd, Hyundai Merchant Marine, 'K' Line and MSC.

This article is tagged to:
Sector: Shipping
Geography: Global

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