Just like pretty much anybody. Everyone keeps hoping against hope, everyone is afraid to show weakness, and nobody likes to tell the boss no. Typically the staff knows for months that the end is nigh until some minor event precipitates the final undeniable crisis.
Megan McArdle has some interesting things to say about this in her book "The Up Side of Down." Chapter 5 is about handling crises (in general) and the GM failure (in particular).
"Wagoner [the head of GM] seemed to believe that by not admitting GM might declare bankruptcy, he could somehow keep it from happening. What he thought would take place when the company ran out of cash is not clear. Nor is it clear why his executives and his board of directors nodded and said 'Yes, Rick' rather than insisting that he confront reality. Instead, they helped him sustain his delusion by formulating a mad plan to merge with Chrysler, as if strapping together two nearly bankrupt auto firms would somehow make both of them solvent."
https://www.amazon.com/Up-Side-Down-Failing-Success/dp/01431...
Hanjin just stopped in place for weeks. No plan.
I guess this is because every big industry runs on commuters nowadays, so there are all these people who both are in the industry and read HN.
My favorite typo of the week!
Office and factory workers of a suddenly-derelict company can walk off the premises and go home. Imagine finding out that not only will the paychecks stop, you also can't leave your desk.
Obviously not ideal, but at least you get fed and eventually get back home.
On the other hand, unlike factory workers in a totally bankrupt organization, the ship crews will get paid - they get "priority" on the ship and cargo; if the ship gets sold in some auction or restructuring, the new owner can't take possession until the previous crew gets paid.
1: "I need water"
2: "Don't worry, next year you'll (probably) have enough money to buy some"
Surely there are international agreements with remedies for such situations? When do the coastguard step in and save the crew from dehydration/starvation?
But am not aware of reports about how things are for them this week.
I'd imagine in many cases, the cost of solving the problems caused by not being able to pay fees is going to be higher than the fees themselves. So are there not insurers who benefit from paying these fees, rather than paying out larger claims later?
The way this is supposed to be solved is bankruptcy protection; no-one can claim their specific debts, the administrator will figure out the best way to get as much money as possible and distribute it equally. I suspect the problems in this case are mostly caused by the international aspect: Korea may recognize a bankruptcy but that doesn't necessarily mean all the ports around the world do. I'd guess that international bankruptcies are probably rare enough that the system hasn't really been ironed out yet.
I'm not sure where insurance comes into it?
The structure of present day shipping implies there could not be an orderly shutdown.
Continuously moving modern freight is akin to a bank. Any efforts to quickly "wind-down" the operation leads to a shortfall in cash, accelerating the bankruptcy process rather than stopping.
Does "this" just refer to Hanjin's mess, or does it also include the possibility, described in the OP, of several other shipping companies also going under?
EDIT: More on arrest of a vessel: http://www.maritimelawcenter.com/html/arrest_of_vessel.html
Management didn't have a plan for an orderly shutdown, so when the company went into receivership, everything just stopped. Just like many failing startups, the web site continued to indicate nothing was wrong. They've now put up a spreadsheet with current vessel status, but that took weeks. The status has entries such as "Arrested", "Unpaid Canal Fee (Suez)", "Arrested by Bunker Supply Co. (Panama Canal)", and "Port labor rejected" (they're way behind on their payments)". There are about 500,000 containers stuck with Hanjin.
Admiralty law is especially harsh on bankrupt shipowners. In many jurisdictions, ships can be seized regardless of bankruptcy status. Some Hanjin ships have been seized. Some are waiting offshore until somebody puts up the money for unloading and refueling. There were four stuck off the coast of California. Hanjin has come up with enough money to get two of them into the port of Los Angeles and unloaded. Those appear to be ships Hanjin leased, rather than owned, and a court in Korea has told them to unload and return all their leased ships ASAP. Courts in about 15 countries are involved, trying to untangle this mess. The US Maritime Commission is trying to get cargoes unloaded, but they don't have much authority. Ports are unwilling to let Hanjin ships in unless they have enough money to fuel up, pay a crew, and leave - they don't want them stuck at their docks. Meanwhile, some of the ships are running low on food and water.
Then there's the empty container mess. In the container business, you pay a per-day fee when you hold someone else's container, so everyone tries to return their borrowed empties quickly. But most of Hanjin's empty container return points are shut down, and are not taking empties back. Many of those empties are on trailer bodies, and are tying up trailers needed to move freight. Truckers are angry about this. Shippers are having trouble getting enough empty trailers.
This will all get unwound, but it's going to take weeks or months. There are going to be really big post-Xmas sales as the delayed cargo is unloaded.