Hanjin's collapse and the resulting chaos in the global shipping sector are symptoms of deeper ills caused by a capacity glut that will remain even after the resolution of Hanjin's crisis.
Segments of the global shipping industry are suffering with their deepest ever downturn and the collapse of Hanjin is the latest casualty in a crisis which began in 2008. Here's a look at volatile freight rates for oil tankers and dry bulk ships:
Capesize benchmark rates
Supertanker benchmark rates
Note: Rates refer to average daily earnings for dry bulk ships which typically transport 150,000-tonne cargos such as iron ore and coal, and supertankers capable of carrying up to 2 million barrels of crude oil on the Middle East Gulf to Japan route.
A look at year-to-date performance of Hanjin Shipping and the broader market. The troubled container shipper filed for court receivership on Aug. 31, a day after its creditor banks decided to end financial support for the company.
*China Containerized Freight Index
Note: Map excludes Hanjin's 53 tankers.
DEBT in the shipping industry
A look at the debt situation of global shippers as of Sept. 20. Hanjin is ranked 19th based on total debt. It also has the second highest debt to enterprise value, which shows much of the price paid by a potential buyer would go towards repaying debt.
Notes: EBITDA = Earnings before interest, taxes, depreciation and amortization; EV = Enterprise value, often used as a more comprehensive alternative to equity market capitalization, includes market value of shares and outstanding debt; Net debt = Total debt - cash; EBITDA-to-interest ratio assesses if a company is at least profitable enough to pay off its interest expenses; Data is based on last available financial statements.
Sources: Thomson Reuters; The Baltic Exchange
Photo: Reuters/Lucy Nicholson
By Ashlyn Still, Jiachuan Wu, Christine Chan and Jin Wu | REUTERS GRAPHICS