One of today’s reports in InforMare reads as follows:

“Hanjin blames US $ 631 million 2013 loss on low rates and overcapacity”

“Hanjin Shipping has posted a net loss of US $ 635.7 million for 2013 dragged down by falling freight rates and overcapacity in the liner trades …

“The result pushes the South Korean carrier deeper into the red, after recording a loss of US $ 596.4 million in 2012 …

“The company reported an operating loss of US $ 259 million under the influence of falling rates owing to the oversupply of container vessels …

“‘Oversupply in the 2014 market is expected due to the continuous deliveries of new mega size vessels. However, the carriers will push harder for improvements in profitability. Therefore the shipping industry will gradually start to stabilize,’ said the company.” –

These guys are hopeless.

Hanjin Shipping is losing its shirt, the company admits, because of overcapacity. That simply means that they ordered too many new ships. And they understand that. They admitted it.

The buyers they were counting on to scoop up those hundreds of thousands of TEUs in 2012 just weren’t there. The “recovery” that the industry consultants had promised never materialized.

Those same consultants assured them, however, that for sure the “recovery” would take place in 2013, so Hanjin continued to add capacity to their bloated and inefficient fleet.

But you can’t blame them. All the other carriers – the competition – were adding capacity.

So in 2013 Hanjin, along with the competition, continued to absorb losses.

It has yet to occur to shipping magnates that worldwide unemployment has prevented folks from demanding supplies from Asian manufacturers.

And it has yet to occur to these shipping magnates that the demand for goods is declining because folks just can’t afford to pay the prices being asked. So, how do these geniuses solve the problem?
They just raise freight rates and order bigger and bigger ships. Right. Higher prices will surely tempt the unemployed to spend money they don’t have, on goods that won’t be carried by those new mega ships, that will be delivered to carriers that have bosses who wear blinders.