Hanjin shipping Co. has filed for court receivership and is facing the possibility of bankruptcy

For the first quarter, Hanjin Shipping reported a net loss of 261.1 billion South Korean won ($233.6 million) on sales of 1.59 trillion won, citing freight rates’ drop to record lows. That spurred the shipping line to file for court receivership , a complex international process that will mean the judicial system will decide whether Hanjin will remain a going concern.

Hanjin hasn’t been alone in struggling in the current market, analysts said.

“This is a reflection of the current turmoil in the shipping markets where oversupply of ships is simply killing the market,” Pradeep Rajan, senior managing editor for Asia Pacific shipping and freight at S&P Global Platts, told CNBC’s “Squawk Box” on Friday. “It’s simply too many ships and freight rates at historical lows.”

Hanjin represented nearly 8 percent of transpacific trade volume for the U.S. market.

One of the ripple effects is higher freight rates for the transpacific market. USPTI anticipates the higher cost to be short term and applicable during the historical peak season. Freight rates for routes out of Asia have surged as much as 50 percent, according to media reports.

Even if Hanjin were to entirely colaspe, it is not clear that it would affect the industry much.

“Ironically, the collapse of Hanjin will do nothing to address the excess capacity in the industry,” IHS Markit’s Knowler said, noting that the ships it operates will be sold or taken over with other charters.

“Hanjin exiting the market will not reduce the overall amount of ships,” he said. “It doesn’t ease the fundamental problem of too many ships and too little cargo to put on them.”

Knowler didn’t expect Hanjin to herald a wave of shipping failures, but he noted that it could speed up efforts to consolidate the industry into fewer players.

But Kiwoom Securities’ Yoo was slightly more optimistic, taking Hanjin’s likely demise as a sign that shipping rates may have hit bottom.

He expected that U.S. demand will begin to pick up, while China’s demand would stabilize and the European Union’s malaise would bottom, likely leading to improvement in global trade.

USPTI opines that indeed freight rates will increase in the short term but stabilize at levels consistent with trading conditions once the shook factor has worn off and in fact carriers are already planning and announcing additional incremental capacity to fill the temporary void created by the Hanjin financial news. The ocean transport business has historically been a long term cyclical business with the gaps between supply and demand capacity following a similar pattern very 4 to 6 year cycle. We believe rates will stabilize at near compensatory levels (albeit lower than current spot rates ) within 60 to 90 days and allow trading conditions to dictate actual price.