The 7th largest container shipping line in the world, Hanjin Shipping, has filed for bankruptcy. Dozens of its ships are refusing to enter ports around the world amidst reports that many have been seized, and in other parts of the world stevedores are refusing to let them into port without advance payment of port dues.

According to the British International Freight Association, spot rates on freight have rocketed on some routes. BIFA’s website reported, “Rate assessment increased by 42% to $1,674 per 40ft container on the Shanghai-Los Angeles route, by 19% to $2,151 on the Shanghai-New York route and by 39% to $1,826 on the Shanghai-Rotterdam route.”

According to other reports there are millions of dollars of goods aboard these ships that need to be delivered to retailers ahead of the festive season and peaks at Black Friday and Cyber Monday. Jonathan Gold, of America’s National Retail Federation is said, “There is millions of dollars worth of merchandise that needs to be on store shelves that could be impacted by this.”

For the industry as a whole there have been problems of oversupply and overcapacity as a number of lines have launched 19,000 TEU capacity ships for their round the world routes. Seeing this in the offing a number of large lines have gone into alliances to share the risk and inoculate themselves against potential shocks.

As things stand, it has been reported that Hanjin has filed for bankruptcy protection from the S Korean courts. Where this may well be granted, industry observers say that this will only get the goods ashore – Hanjin as we know it is unlikely to survive.