Blog/News

Hanjin Shipping Bankruptcy Update

Sadie Keljikian, Top Billion Finance

South Korean Hanjin Shipping has been the talk of the international shipping industry since the company filed for bankruptcy on August 31st.

Shippers all over the world have grappled with declining demand as trade flows have slowed, particularly from China. Hanjin has faced especially enormous financial difficulty in the last year, which came to a head near the end of August, when creditors stopped supporting the company. On August 31st, Hanjin filed for bankruptcy in South Korea and sought recognition in the US under Chapter 15 of the bankruptcy code. Since then, Hanjin has spent much of their time scrambling to reconcile shipments that were still in transit when the company officially filed.

The most notorious aspect of Hanjin’s bankruptcy has been the fate of their ships and cargo. Immediately following the bankruptcy filing, Hanjin’s shipments found themselves with nowhere to go. Ports refused to grant access to the ships, due to uncertainty about who would be responsible for docking fees, container-storage and unloading bills. As a result, nearly $14 billion in cargo was stranded at sea for several weeks. Stranded as well were the crew members of the container ships, as well as a young British filmmaker who gained international attention with her social media coverage of the situation while she was stranded on a Hanjin chartered ship.

Reconciling the massive debt of Hanjin, the ninth largest shipper in the world, has proven difficult. Creditors seized a number of ships when the extent of the company’s struggle came to public attention, but a judge has since decided that all ships chartered by Hanjin must be returned to their owners. The New York Times, among others, has blamed a lack of insolvency planning for the ships becoming stranded, often drawing a comparison with Lehman Brothers’ notorious failure in 2008.

Regardless of the company’s financial future, the lack of planning that led to cargo stranded at sea has undoubtedly harmed Hanjin’s reputation. They will need to demonstrate a remarkable ability to plan and recover in order to thrive after this debacle.

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Collaborative Manufacturing Hub to Open in Chicago

Sadie Keljikian, Top Billion Finance

Chicago may soon have a domestic manufacturing sector to be reckoned with.

The opening of the brand new mHUB was announced by Chicago Mayor Rahm Emanuel and is billed as “Chicago’s first innovation center focused on product development and manufacturing.” The project is a joint effort of World Business Chicago and the mHUB board of directors intended to provide much needed resources to local manufacturers.

Said Mayor Emanuel, “mHUB builds on Chicago’s history as a home for hard-working men and women with bold vision and big ideas… mHUB will unite the manufacturing center with our vibrant technology-focused entrepreneurial scene, and will encourage new and existing manufacturing as a driver of growth for our city thanks to new applications in product development and manufacturing.”

The space is roughly 60,000 square feet and encourages collaboration and communal work among entrepreneurs, manufacturers, engineers, designers and investors. With numerous partners and investors like GE Ventures, Marmon, Chase Foundation, Comcast Business and Kirkland & Ellis, the state of the art production space has garnered a lot of attention from top global investors.

To jumpstart the center, at its opening, the mHUB board will work with the two year old Catalyze Chicago Incubator to help companies develop prototypes into finished products.

“We are excited to introduce mHUB to the manufacturing community,” said World Business Chicago President and CEO Jeff Malehorn. “mHUB will help spark innovation and growth in the industry, and encourage the development of cutting-edge manufacturing products for the future.”

The space is set to open near the end of the year.

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