Hanjin, the country’s largest ocean container shipper, will seek bankruptcy protection in 43 countries, including Canada, Germany and Britain, FSC officials said.
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“Related ministries including the Ministry of Oceans and Fisheries should immediately take emergency transportation measures such as sending container ships to replace seized vessels to minimise disruption on trading companies”, he said during a Cabinet meeting on September 6.
Hanjin’s ships will make calls at ports including Singapore, Hamburg and Busan, South Korea, where its vessels are unlikely to get stranded, Deputy Finance Minister Choi Sang Mok said in Seoul Monday.
The company also filed for bankruptcy protection in the US Friday to protect its vessels from being seized by creditors, the Wall Street Journal reported. Hanjin Shipping’s collapse last week has caused chaos in global trade networks and a surge in freight rates, as ports and vendors refused to provide services to Hanjin vessels for fear they won’t be paid. An unnamed labor union official said that “despite (the urgency), the government is only demanding the cash-strapped shipping company to secure operating funds, pushing sailors closer to the edge of a cliff”.
As most of Hanjin Shipping Co’s assets are stranded at sea or in ports world-wide, the the South Korean company is seeking to protect assets world-wide.
The South Korean giant represents almost 8% of the trans-Pacific trade volume for the USA market, and with Hanjin’s container ships marooned offshore, major retailers were scrambling to work out contingency plans to get their merchandise into stores.
Since 2011, Hanjin Shipping has suffered losses. The stock is now more than 40 percent from a month ago and 80 percent down over the year. “But in the view of many experts, that possibility is low”, Yonhap quoted Yim as saying. After Hanjin Shipping filed for receivership last week, its vessels and their goods have been left in limbo as port operators refused work pending payment, roiling customers’ supply chains before the year-end shopping season.
Hanjin struggled with debts and losses for years.
South Korean regulators allowed trading to be resumed Monday after Hanjin’s court receivership was granted, but the share price plummeted by the daily limit of 30 percent shortly after the market opened.
That still falls short of the fees that Hanjin Shipping must pay for services it needs to offload cargoes already on its vessels.
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