Learning from Hanjin Shipping's failure: A holistic interpretation on its causes and reasons

Recent years have observed that the world shipping industry is reflected by the developments of unprecedented dynamism, instability and uncertainty. These developments in the industry have led its stakeholders to take such a counter-balancing measure as merges and acquisitions, and more aggressive and bigger scaled alliance establishment. One of the most striking incidents happened in the shipping industry was the bankruptcy of Hanjin Shipping. More frightful is the fact that the process and speed of Hanjin's collapse was remarkably brief and short given the size and scale of the company. The Hanjin case is unique in a sense that the company had been grown in line with its nation's economic development, which was (and still is) made by the export-oriented economic policy: the late shipping company had been evolved as having moved the nation's wealth. This paper aims (i) to holistically examine what and why it was happened as it was, by reviewing available literature as a way to synthesise, (ii) to interpret intrinsic and extrinsic causes, and internal and external reasons by establishing an interpretative structural model, and (iii) to discuss provisional findings as a way to offer an implication to transport policy in general and shipping policy in particular. In doing so, this paper attempts to provide industrial stakeholders with an insight from the failure as a lesson to be learned.