Hajin Shipping Co. is the seventh biggest container carrying company in the world. Recently Hajin has been faced with one of the biggest financial collapses ever seen in the shipping industry. Resulting in 14-billion USD worth of goods stuck in 26 countries around the world, this collapse shocked the global market. This collapse affected not the future of Hajin, but also the hundreds of businesses who have a stake in the now inaccessible goods. Companies such as Samsung, Nike, and Hugo Boss have found themselves in a situation where, if they want their goods delivered on time, they will have to find a different means of transportation, which will likely be more expensive. While this may not be a catastrophic problem for these big brands, smaller companies, such as Sung Wang Co. have $450,000 worth of textiles held up. This is equal to a quarter of the company’s profit last year. If they were to lose these textiles it would send them into a financial downfall. This situation is affecting everyone and will most likely begin the waterfall affect creating an even larger scale issue.

This entire mess happened after Hajin’s liabilities largely outweighed their assets , causing them to declare bankruptcy and begin dissolving. The company got swallowed up by debt because of a decline in worldwide trade and slow demand for products. Although this decline has not yet destroyed another container carrying company , Hajin has been affected by it much more directly than some of the top competitors. This is worrying because if this is the beginning of a new trend, many more companies will likely follow in their footsteps.

Looking into this story I was wondering how it is possible for a company of this size to become bankrupt so quickly. I have come to the conclusion that this situation happened because of numerous failures in the Supply Chain Management and Operations within the company. These two processes are some of the most important things in business and when they are improperly managed a company’s success is almost guaranteed to decline. These two factors are a major part of the company’s foundation; who’s services rely on assisting other companies in these two areas of business. They are another link in the chain that a company needs to get its product from beginning to end, and without that link nothing can move forward. It goes to show how important the two are in a successful business and how without them things go wrong quickly.  It will be interesting to see how this further unfolds and who has to step up to fix this problem.

 

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http://www.theglobeandmail.com/report-on-business/international-business/hanjin-collapse-rattles-global-supply-chain/article31750345/

http://www.theglobeandmail.com/report-on-business/international-business/asian-pacific-business/kimchi-at-sea-hanjin-cargo-woes-deepen-as-bank-cool-to-plea-for-funds/article31762038/

Hanjin Shipping collapse leaves up to 15,000 cargo containers piled up

http://www.zerohedge.com/news/2016-08-31/global-supply-chains-paralyzed-after-worlds-7th-largest-container-shipper-files-bank