Hanjin Shipping had been responsible for about 10 percent of the trans-Pacific trade, according to media reports. Last year, the port handled almost 600,000 containers.
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Terminal operators and other port service providers such as tug boat operators have been unwilling to provide services to Hanjin for fear of never getting paid, after the shipping filed for court receivership on 31 August. Further, the inability to return empty containers is causing backups and interfering with chassis availability. Separately, government offices including the foreign ministry, oceans ministry, and finance ministry, joined forces to secure stay order for Hanjin Shipping vessel calls and unloading at ports around the world. It said 540,000 TEU of cargo already loaded on Hanjin vessels would face delays.
Hanjin is a very solid company with a long history the biggest shipping line in Korea and one of the top biggest shipping lines worldwide, he said.
The chains are working to minimise delivery disruptions from cargo waiting to depart Asia, travelling on the ocean or arriving at ports, Jonathan Gold, vice president for supply chain and customs policy at the National Retail Federation trade group, said last week. Additionally, because each entity along its logistics chain – from tugboats to truckers moving containers – is anxious about getting paid, the company’s ships that are already loaded and crossing the ocean will face difficulties as they reach their destinations. Its seven container ships are also denied access to terminals and ports at South Korea’s main ports of Busan and Incheon.
Hanjin has been losing money for years.
But since Cho’s son Yang-Ho took over in 2014, Hanjin Group has spent about 1.2 trillion won ($1.07 billion) trying to save the troubled shipping company, which has foundered as freight rates have tanked due to weak demand and soaring global capacity. Offloading the containers may help customers like LG Electronics get their televisions and other cargo back on land and book the products onto other ships or for transport by land. Yoo said the Korean government has vowed to pull out all the stops to minimize the fallout from the Hanjin crisis and has formed a response team to keep close tabs on the situation.
The protracted global economic downturn in recent years years severely affected profits across the cargo shipping industry. They had hit a record low on Monday.
“They’re on ships that are still in transit”, said Krieger.
Poskus expects the spike in prices to last a month or two.
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Hanjin Shipping’s liquidity is very tight with short-term debt of USD2.7bn against cash of USD205m at end-2015.
