Live on Bloomberg TV

00:00What are you making of all this. Well at the end of the day the industry has been money losing. And like any industry for long term it's just not sustainable. But the fallout 100 shipping as we like Lehman Brothers to the financial markets gets credit causing that. I mean it is a huge huge nuclear bomb. It shakes up the supply chain. The cornerstone of globalization you're talking about 120 billion dollars worth of goods on those ships that are stuck before deliveries to the ports and to people like Wal-Mart. So there is a material impact to the supply chain . And people are suffering from the consequences of this major shakeup. So isn't material. It has never happened in the past . It surely must have had an but but probably not to this scale may not do this. Smaller ones. But the scale of it just huge huge. You know you're talking about one of the largest shipping lines in the world that is moving boxes millions millions of boxes here and it affects you as well. You've got you've chartered three ships to them haven't you. Yes we have three ships on long term lease to them obviously given the fallout to you know we're having a little bit hard time dealing with them but then no day in the big picture the impact is minimal to us . But what I'm trying to get is the impact to the manufacturers of the supplies the ship the receivers. People like Wal-Mart's people like factories and I suppose and you're not the only ones who charges ships that there must be a whole load of other people to have done exactly the same thing. Are you going to get these three boats back. You think these ships work. We're evaluating the options then do they. You know we're comparing what they offer to us through this receivership and whether we can get from the market and again at this point in time I have nothing more to comment but then that what I'm trying to say is the impact is huge. The partners shippers and manufacturers the whole supply chain is being shaken up. So there's a tremendous flight for safety. The raises is shot up like crazy you know over the short term and the long term I don't know. But this is one thing for sure this fallout will help. You must have some serious damage to how our charter rates and freight rates by the ferries have gone up with each other raises cause I've been really impacted as well. So we're evaluating options for ourselves but the freight rates have really gone up substantially from Asia to North America. The rates have doubled from Asia to Europe. The rates have gone up 40 50 percent which is a welcome news to the industry. It's just been a long time coming I suppose because it is good. But I mean it's strange because many of these ships are half empty while they're there half empty but then they depending on which way you look at the that the load factor is actually pretty good because we're talking about Christmas peak season at this point in time our big ships are generalists because 90 95 percent full plate and so they're pretty get the cargo volume is not the issue right now is the systemic impact from Hang Seng fallout isn't like a nuclear bomb. You're dealing with all the after quake you know consequences the creator is involved the manufacturers involved shippers involved receivers involved the container terminals involved all the material. I mean it goes back to an intrinsic flaw is that in the industry which is when times are good they order a ton of new ships and by the time they get them the whole market's gone against them and they're stuck with excess capacity and this happens all the time then they have to scrap and then they two things are getting better and then they will then order more ships. So this is a so called his self adjusting process. I guess it happens to any other industry in the commodity side on manufacturing side . That's just part of life. You deal with that you know cycles is phases you know C-SPAN is concerned what we do release those ships on long term basis do right you know over the waves of the sea Colletti and hopefully we get the stability out of in you know this this second recall process that that's our business model and it was done very well in spite of this. There's hanging fallout and again there's there is a small impact to us . But one thing I want to comment is South Korea is here to stay and they will recover from this thing and the Korean economy is heavily dependent on exports. I'm sure they're working very hard to try to come up with a national carrier status. Do you think this would make you think twice though C-SPAN and doing business in South Korea. Correct. It would make you think twice. Correct. I mean it sure. I mean you have Sahil Kapur head had to stay but you're thinking hang on a second. Maybe . Yeah. South Korea. They're great. Yeah. You know obviously this is not a pretty good situation to be had but I'm looking over long term. I believe in the resilience of the South Korean economy and South Korea as a big economy with a one point five trillion dollars. Forty five percent of which for exports. I think they need that national shipping carrier and I'm looking forward to to working with them in that direction to help them build a two national carrier sponsored by the government so that becomes a critical link in their economy. The economy is heavily export oriented. They lead a reliable supply chain to deliver their goods to the receivers. That is very very important. I'm looking forward to working with them and then they I believe South Korea will come out stronger more cautious in the short term .

No schedule data available.

Seaspan CEO: Hanjin Fallout Is Like Lehman for Shipping

Gerry Wang, chief executive officer and co-founder of Seaspan, discusses the fallout from Hanjin Shipping and the outlook for the shipping industry. He speaks to Bloomberg's Rishaad Salamat on "Trending Business." (Source: Bloomberg)

More From Trending Business
All episodes and clips

Bloomberg Markets
"Bloomberg Markets" is focused on bringing you the most important global business and breaking markets news and information as it happens.
More episodes and clips