> They will just buy insurance, and the insurance companies will figure it out.

It's not that simple.

Yes, premiums will adjust depending on the finances of the carrier but the cost of insuring the risk itself is quite variable and can be ruinous. The value of a delayed shipment of iPads is much higher than a delayed shipment of board games, yet Apple can tolerate the former while the latter could sink a company. The board game company might not be able to afford to insure the risk, even though the premium could be lower.

The fact is an Apple can manage the risk by spreading the load (they already do it multi modally, and probably already do it for ships too). A small company with one container or less of goods, cannot.

Doesn't Apple famously use overnight air for all their shipping needs? Or is that only for devices?

That's what I meant by "multi modal": they put most of it on ships but buy up enough air capacity to make the early deliveries. Once the ships start arriving they can abandon the air.

Hmm, I've never heard this. All the coverage a few years back was that they use air for everything, so they can scale their production operations in near-real-time as demand fluctuates. That was supposed to be Tim Cook's whole crowning achievement when he was COO. Do you have a source that shows this has changed?

Maybe it will become cheaper for small board game companies to produce their games domestically, once shipping insurance is factored in.

You're talking about a change that takes years to complete, not something that will happen overnight. And production of any good requires some materials which quite likely will need to be shipped in anyway.

Insurance against late delivery is available but very expensive. Ordinary marine insurance does not cover this. The cargo isn't lost, just late.

How does insurance treat the use case where creditors seize the cargo and liquidate it to pay themselves back?

How does that work? Presumably the shipping company doesn't own the cargo.

Nope the shipping company issues a bill of lading as the goods are received for shipping that sets out who owns the container.

The shipping company doesn't own the cargo, but I've read speculation that the creditors can seize the ships, then demand payment to unload the cargo, and if they don't receive payment seize the cargo to discharge the "debt". I don't know how a bill of lading would work in that situation, where the creditor wasn't the original party that the customer signed a contract with, and I'm curious how much latitude a creditor has in situations like these to abrogate previously-entered contracts.

It's really complicated. There are articles by lawyers.[1] There are many countries involved, with very different bankruptcy laws. Much of this involves admiralty law, which has a very different order of priority of creditors than regular bankruptcy law. Lawyers are struggling to figure out all the conflicts of law.[2]

[1] http://www.chinalawblog.com/2016/09/hanjin-shipping-and-arre... [2] http://www.mondaq.com/unitedstates/x/528816/Insolvency+Bankr...

Obviously if the cargo has any value, then the result is simply a higher freight cost than originally expected.

Yes, it is likely that cargo owners will have to pay extra to get their cargo delivered where they want - they have paid for a service, Hanjin won't provide that service, and anyone else will require payment for that same service. Even if the service (or a part of it) is practically unavoidable e.g. the cargo is at a ship and needs to be unloaded, so someone needs to pay for the loading. Maybe they have insured that, maybe not, but they can get their cargo anyway if they want.

That will have the same result. Insurance companies will price based on risk, with the safer carriers having lower risk and hence lower prices. The less safe carriers will have more expensive insurance and be at a disadvantage to the safer carriers. Lack of customers will put them closer to bankruptcy and the circle continues.