Global Logistics: Problems, Impacts and Recommendations for Hanjin

This report provides an analysis of the global logistics issues affecting Hanjin Shipping Company. It identifies overcapacity, supply chain interruptions, and financial mismanagement as key challenges. The report details how these issues negatively impact the company's performance, leading to higher costs, service disruptions, and loss of competitive advantage. It also examines the effects on retailers and importers. The report recommends strategies to mitigate these problems, including identifying cost-effective logistic practices, hiring a competent management team, outsourcing logistic providers, utilizing alternative strategies like private warehouses, and incorporating consolidated shipments. Furthermore, the report emphasizes the importance of timely planning, optimized resource use, and incorporating cargo insurance and supply chain visibility to improve overall logistics performance. The goal is to help Hanjin Shipping recover from the negative impacts of logistic management issues and enhance its financial viability and customer service.

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Global Logistics
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Global Logistics
Every company requires logistic management so as to facilitate performance of activities. Lack
of logistic management strategies affect the performance. In this paper, we consider logistic
management issues facing Hanjin’s Shipping Company. Typically, logistic management refers to
supply chain management applied to satisfy customer demands via control, planning and
implementation of effective storage, movement of goods, services and relevant information from
origin to destination. The main logistic management issues affecting Hanjin’s Shipping
Company are overcapacity and supply chain interruptions. These issues result to low shipping
rates. In that connection, the company is putting a lot of pressure on the shipment process. These
issues affect supply chain services. The main cause of logistic management problems in the
company is based on mismanagement of finances required to facilitate supply chain services
(Hausman, 2007). Again, poor planning decision in the logistic business aspects contribute to
overcapacity.
Consequently, failure of their mismanagement of financial and planning decision in the logistic
business aspects is a shock to global commerce and logistics. This is clearly asserted by Joe
Dunlap, the managing director of supply chain services in Hanjin’s Shipping Company. This is
caused by mounting overcapacity in international shipping and depressed container rates.
Mismanagement of financial and planning decision in Hanjin’s Shipping Company have left
retailers and importers to face higher costs. They also face challenges in terms of service impacts
as they struggle to search for other alternatives of transport.
Logistic management facilitates performance of the company by lowering supply chain service
costs. However, logistic management issues facing Hanjin’s Shipping Company pose negative
impacts to the performance of the company. First, they interrupt supply chain services. In that
connection, Hanjin’s Shipping Company is forced to freeze shipments. This results to loss of
millions of dollars of merchandise held by the company. This affects the store stock for
importers and retailers thus affecting the performance of the company. Another impact on
performance is loss of competitive advantage in the market (Dann and Dann, 2007). Although
Hanjin is one of the biggest shipping company in the world, retailers and importers affected by

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logistic management issues, mismanagement of financial and planning decisions will be forced
to find other shipping companies so as to meet their demands.
In addition, the performance is affected in terms of wealth margin. This is caused by
exacerbating profit margin pressure. Therefore, additional costs and interruption of supply chain
services impact the company negatively. This squeezes the profits earned by retailers who are
forced to withdraw from Hanjin’s Shipping Company. Lastly, the impact of logistic management
issues affect macroeconomic aspects of the company. This expose the company to bankruptcy
and supply chain impacts. In that case, retailers are forced to re-evaluate their strategies on
import so as to mitigate supply chain interruption (Holmes et al., 2015). This make the company
to lose potential customers thus reducing the profit margin.
Despite Hanjin’s Shipping Company facing logistic management issues and mismanagement of
financial and planning decisions, the following recommendations will be appropriate to recover
from negative impacts. Thus, poor logistic planning affects delivery deadline. The company
should identify logistic practices that are cost effective. This will reduce logistic costs. This
strategy will facilitate the company to achieve competitive advantage in shipping industry.
Hanjin’s Shipping Company does a lot of shipping which will be propelled by this strategy hence
remaining financially viable.
Hanjin’s Shipping Company need to hire competent logistic management team. This strategy
will assist the company to meet high customer demands. This will also enable the company to
withstand fluctuating global business climate (Marshall, 2013). For this reason, the company
need to initiate smart logistic management practices.
Again, the company should outsource logistic providers so as to implement logistic practices.
This will reduce mismanagement of financial and decision planning in the logistic business
aspects. It will save money and time. Shipping is a complex process associated with logistic
costs. The company need to have a reliable logistic management practice so as to reduce logistic
expenses such as transportation, labor, administration and storage costs. The company should use
alternative strategies such as private warehouses so as to have sustainable supply chain services.

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Lastly, the company should incorporate consolidated shipments. This is a method of shipping
where an agent combines many shipping companies into one shipment. It is cost-effective and
safer (Krugman, Obstfeld & Melitz, 2012). Again, use of cargo insurance will assist in logistic
planning. It is also important to incorporate strategies in outsourcing, using a single, integrated
platform and supply chain visibility. Timely planning and optimized use of resources are among
the recommendations to be incorporated by Hanjin’s Shipping Company.

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References
Dann, S., & Dann, S. (2004) Strategic Internet marketing. Brisbane: John Wiley & Sons.
Dann, S., & Dann, S. (2007) Competitive marketing strategy. French’s Forest, NSW: Pearson
Education.
Hausman, D. M. (2007) The philosophy of economics: An anthology. 3rd ed. Cambridge:
Cambridge University Press.
Holmes, K, Hughes, M, Mair, J & Carlsen, J. (2015) Events and sustainability.1st ed. Abingdon:
Routledge.
Krugman, P. R., Obstfeld, M., & Melitz, M. J. (2012) International economics: Theory & policy
9th ed. Harlow: Pearson Education.
Marshall, B. (2013) Accounting Information Systems. Australian edition. French’s Forest, NSW:
Pearson Australia.