Santa Claus isn’t coming this year! Global shipping has collapsed! Big ships are stranded as the companies can’t even pay the docking fees!

Clearly, it’s time to panic. The bankruptcy of Hanjin shipping has created a wave of horrifically bad stories predicting the end of international trade as we know it. Recession must be just around the corner as the global system collapses, right?

Um, no. Not even close. The story we have been told is a good example of two key features of financial reporting today. The first is that no one has the slightest idea what they are talking about and the story is completely free of the context anyone might need to understand it. The second is that the only big news is bad news – probably in part due to the first problem.

The Hanjin Boston, awaiting the scratch to dock at Long Beach, CA.

First, the details. Hanjin Shipping, the fourth largest carrier of containerized cargo around the world, filed for bankruptcy protection in South Korea on 31 August. Its assets were seized by the courts and all operations were subject to approval by that court. This put the 86 ships they had at sea in limbo, awaiting approval of the $543 million in docking fees that they would need to pay just to hit the shore and be unloaded.

Hanjin operated about 7% of the trade between Asia and the West Coast. This is indeed the busiest time of the year, as retailers stock up on items for the Christmas season, so we can assume ships are not generally leaving the docks with empty space.

However, they normally do. The problem isn’t that trade is collapsing – it’s been growing at a rate of about 5% per year and seems to be continuing that. Shipping capacity, however, has been growing at over 10% per year since 2005:

Growth in shipping and container capacity. From the International Transport Forum.

Currently, about 40% of the available space on cargo ships is empty. Even in this busy season, it appears that the other carriers have plenty of space to absorb the loss of Hanjin because after an initial spike in shipping rates from $1200 to $1800 per container, the prices have flattened out. The panic is clearly subsiding.

Prices per container out of Shanghai .

So, for all the noise, what happened to Hanjin? In an industry with a tremendous amount of excess capacity, the smaller players are being squeezed out. We can expect more news just like this as time goes on, too, so this story will come up again. It’s also very true that the tiny amount of shipping that Hanjin carried will be easily absorbed by other carriers. Even the great spectacle of ships stranded at sea for lack of docking fees was way out of context, as they cost upwards of $4 million per ship to dock – not a small amount of money.

Reporters used to not believe what they were told.

Is it really time to panic? In one way it certainly is. Mainstream news continues to cram every story into the one narrative they wrote a long time ago – that everything is bad and getting worse. What’s great about this story is that it was once true, too. It simply isn’t anymore.

Global trade continues to expand, just not as much as the really large players like Maersk have been planning. The real question we should be asking is whether or not this is a deliberate attempt to monopolize the field or very bad forecasting by people who really should know better. Both of these are much more interesting narrative boxes to put financial stories into, but they aren’t very sensational.

But they are very much the stories we should be watching – and we could be if it wasn’t for the gloom and/or doom which is saturating our news diet. There is a new economy coming and the future belongs to whoever controls it. On the shipping front that won’t be Hanjin. Who will it be? How much control will they have over this vital industry? Do they know what they are doing, and if they do are they planning to create a monopoly?

If you think about it, it’s even scarier than the lazy “let’s all panic” story. But it’s not being told.