Hanjin Shipping’s 300 Billion Bankruptcy Lesson,

Hanjin Shipping’s 300 Billion Bankruptcy Lesson, Korea-Japan Undersea Tunnel 90 Trillion Who is it for
Once the shipping infrastructure collapses, it cannot be restored. If you have money to spend on the tunnel, spend it on the port

Dr. Kim Gap-bong, AI and Economic Research Institute, Kyung Se-min Kim

1. Catastrophe caused by 300 billion won

On Aug. 31, 2016, Hanjin Shipping, the world’s seventh largest shipping company, went into court receivership. It was because there was no W300 billion. Creditors demanded W700 billion, and Hanjin Group offered W400 billion. The difference was W300 billion. The government rejected the emergency funds.

Hanjin Group Chairman Cho Yang-ho said, “I will give up my managerial control. Please save my company.” To no avail. On February 17, 2017, Hanjin Shipping went bankrupt. The shipping company that operated 97 ships and covered 60 routes in the Americas, Europe and Asia disappeared overnight.

Dozens of ships were detained in the sea around the world. Cargo worth 14 billion U.S. dollars was stranded. Hanjin Shipping’s container ships were denied entry and unloading at many ports around the world. There was widespread rejection from China to Spain.

2. The price you paid to save 300 billion won

The government chose HMM instead of Hanjin Shipping. Korea Development Bank and Korea Maritime Development Corporation invested 6.8 trillion won. It is 23 times the 300 billion won.

The damage to shippers was also severe. According to data from the Korea International Trade Association, fares on the Asia-U.S. route jumped 40% right after the bankruptcy of Hanjin Shipping. Korean shippers became dependent on foreign shipping companies and lost their ability to negotiate fares. During the COVID-19 pandemic in 2020, emergency transportation of masks and medical equipment was necessary, but since there were no national shipping companies, they relied on foreign shipping companies. The freight rate was three to five times the usual.

Busan Port was also hit. According to the statistics of the Busan Port Authority, the volume of transshipment at Busan Port dropped sharply immediately after the bankruptcy of Hanjin Shipping. It decreased by 3.9% year-on-year between September and December 2016. The volume was moved to Qingdao in China and Yokohama in Japan.

According to estimates by the Korea Shipping Association, domestic exporters and importers have borne additional logistics costs ranging from hundreds of billions of won to 2 trillion won a year after the bankruptcy of Hanjin Shipping. Some analysts say the national loss amounts to 15 trillion won to 17 trillion won.

3. Once the herb collapses, it’s over

The Great Kobe Earthquake struck in January 1995. Kobe Port was the world’s sixth largest container port at the time. The port function was paralyzed by the earthquake. The shipping companies moved to other ports.

A decade later, in 2005, Kobe Port’s ranking dropped to 39th. Port facilities were restored, but shipping companies did not return. Once a network of liners has been left, it is difficult to reverse. Herb’s second place is meaningless. It’s either the first place or eliminated.

The same was true of Hanjin Shipping. Nine years have passed since its bankruptcy, but the shipping ecosystem in Korea is still recovering. It invested 6.8 trillion won (6.3 billion U.S. dollars) in HMM to lift it to eighth place in the world, but now it is under pressure from the sale. Once the shipping infrastructure collapses, it takes astronomical costs and time to recover.

4. Trap of KRW 90 to KRW 135 trillion for the Korea-Japan Undersea Tunnel

The construction cost of the Korea-Japan undersea tunnel is 10 to 15 trillion yen, and 90 to 135 trillion won in Korean won. A country that lost 17 trillion won after trying to save 300 billion won will spend 90 trillion won on the tunnel?

If a tunnel is built, Busan Port becomes dangerous. In 2024, Busan Port processed 24.4 million TEUs. Of these, 13.5 million TEUs account for 55 percent. Busan Port is not an import/export port, but a global transshipment hub.

When the Korea-Japan Undersea Tunnel is breached, the flow of cargo changes. There is a route that goes directly to Japan without going through Busan. Some of the transshipment cargo can be moved to Japanese ports. At that moment, the hub premium at Busan Port is broken.

Japan’s GDP stands at 4.3 trillion U.S. dollars, while Korea’s GDP stands at 1.88 trillion dollars. The economy is 2.3 times larger. If it is directly connected to land, the larger side will try to find a logistics nodule. There is a risk that Korea will be reduced to a passing section, not a global hub.

Hanjin Shipping’s bankruptcy started at W300 billion and resulted in W17 trillion in losses. On a much larger scale, the Hanil Undersea Tunnel could destroy the Korean shipping ecosystem.

5. If you have money, spend it at the port

The Ministry of Oceans and Fisheries announced that it will invest 14 trillion won (approx. The ministry aims to construct a new port in Jinhae by 2045. It also plans to construct 66 berths, including the Port of Tuas in Singapore. It will also build a facility where 30,000 TEU-class super-sized vessels can stably navigate.

Now is the time to strengthen the hub. Large ships reduce the number of ports of call. They stop by only the hub ports to unload cargo all at once, and feeder ships carry them to the vicinity. Large ships do not stand unless they are hubs. If a ship is removed from a hub, it is not a decrease in the volume of cargo, but a loss of cargo.

If you have money to spend 90 trillion won on tunnels, you should spend it on port upgrading. Investments that protect hubs and investments that destroy hubs are in the opposite direction.

Hanjin Shipping’s bankruptcy was a tragedy. It lost 17 trillion won while trying to save 300 billion won. The undersea tunnel will be a far bigger tragedy than that. It is like destroying a hub by oneself at 90 trillion won (approx.

History repeats itself. Once in tragedy, second in comedy. Third in no way.

[References]

· “Do you really not know Busan, the Korea-Japan Undersea Tunnel that is sailing in Busan?” by Kyung Se-min AI Economic Research Institute, 2025.
· “[Shipping Special] Controversy over the sale of HMM, Lessons Taken by Bankruptcy of Hanjin Shipping,” Incheon Today, 2025.10.16.
· “[Kyung Se-min] The price paid by Korea after flying Hanjin Shipping for 300 billion won,” Incheon Today, 2025.9.15.
· “Korea Depends on Shipping 99% of Import & Export…” HMM Privatization and Hanjin Shipping”, Incheon Today, 2025.9.12.
· “Review of feasibility of Korea-Japan Undersea Tunnel”, Ministry of Land, Transport and Maritime Affairs, 2011.
· “GDP (current US$)”, World Bank, 2024.