What Hanjin's Bankruptcy May Mean to Ag Producers

With Hanjin Shipping filing for receivership in South Korea, what will it mean to ag producers across our region? Vice President of Bossco Trading Shelley Boshart Davis says that with the global economic slowdown eight years ago, the industry expected to lose some ship line companies due to the oversupply of vessel capacity worldwide, however most were surprised that it was Korea's Hanjin which was the world's seventh largest shipper.

She continues with what ag producers can expect moving forward.

Davis: "The immediate effect is that all the other ship lines have immediately put in these quite large general rate increases — we call the GRIs. So we are seeing a freight increase and it depends on your commodity but any where from 20 to 50 percent increase in freight costs come October first. It is one of the rules of the FMC that you must give a 30 day or one-month notice to all shippers to increase those rates. So all shippers almost immediately put in that kind of GRI for a 30 day notice. So come October first, and I believe come November first again we are going to see some pretty hefty increases in exporting. And so we are seeing a huge increase demand in September before the October first deadline."