Former Hanjin Counsel Outlines Major Problems in The Logistics Industry
Wook Chung, the former General Counsel for now-defunct shipping giant Hanjin, recently outlined what he called “practical issues” confronting the shipping industry as a whole in an article for MarineLog.
Mr. Chung writes the first and “foremost” problem plaguing the shipping industry is the number of players involved in a single transaction. Mr. Chung writes that the large number of participants in one shipment increases the risk of the shipment, where one drop-off endangers the profit margins of all the other parties involved. That interdependency, he believes, is poorly recognized and hardly understood.
Secondly, Mr. Chung believes that because of the failure of such a large industry power, all players in a shipping transaction will take extra precautions to protect themselves. In the process, he believes the legal documentation that will be spun out from these risk-averse discussions will put an emphasis on “self-preservation”, though some of the language may be ultimately unenforceable and could instead create a false sense of protection. He advises prudence above speed.
Finally, Mr. Chung notes that Hanjin’s bankruptcy guarantees wide-ranging industry changes which also muddies up the future of logistics and freight management. Regulatory changes are a near guarantee. So is the need for void filling companies to take up Hanjin’s place who, by sheer size needed to fill such a gap, will wield their own influence that the rest of the industry will need to adjust to.
It’s interesting to note that Mr. Chung applies his knowledge of maritime and transportation practices and real experience with an industry behemoth to highlight issues within the industry, and not Hanjin alone. When he concludes by suggesting the industry has a lot to learn from Hanjin’s failure, it’s not clichéd hyperbole; the issues that hurt Hanjin remain even if they do not.
You can read the complete article here.
By: CoLoadX on March 15, 2017, 6:32 p.m.