Hanjin Shipping, South Korea’s largest and the world’s seventh-largest shipping company, filed for court protection on Wednesday and stopped accepting new cargo, after creditors rejected its self-rescue plan.
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USA retailers, bracing for fallout from Hanjin’s woes as they stock up for the crucial Christmas holiday sales season, have asked Washington to step in to help resolve a growing crisis, the Wall Street Journal reported Thursday.
Hanjin Shipping has handled close to eight percent of the cargo volumes traversing the Pacific to the U.S. market where the The National Retail Federation has appealed to the government in Washington, DC, to work closely with authorities in South Korea, and the federation has also warned of severe consequences for consumers as well as the USA economy overall.
South Korea’s top ocean shipping company, Hanjin Shipping Co., is in bankruptcy proceedings following years of losses, as its family-dominated controlling conglomerate struggles to adapt to an era of slowing growth.
The Hanjin Group made a decision to give emergency financial support to Hanjin Shipping put under court receivership for the company’s liquidity.
Hanjin’s bankruptcy would be by far the largest in the history of container-shipping, which is suffering from its worst downturn in six decades. Ports around the world, including in Los Angeles and Long Beach, will not allow its ships to dock out of fear the company can’t pay its bills.
Hanjin is likely to have more recourse against its ships being seized in countries which, like South Korea, have signed the United Nations-backed UNCITRAL Model Law on Cross Border Insolvency, which include the United States, United Kingdom, and Australia, lawyers said. Hanjin Shipping spokesman Park Min did not confirm any other seizures.
Hanjin Shipping shares fell 2 per cent to 1,215 won by midday in Seoul on Monday, giving the company a market value of 297 billion won ($US268 million). They will also help Hanjin obtain stay orders in over 40 countries to keep creditors from seizing its vessels and to secure entry rights at ports.
The Long Beach Board of Harbor Commissioners said Sunday that its members were monitoring the Hanjin situation around the clock to try to ensure the smooth flow of cargo.
Hanjin Shipping advanced 320 won to close at 1,390 won in Seoul trading.
“This is a case study in what happens when we are a global economy”, said Sanchez, using the opportunity to raise questions about trade deals that she said allow worldwide companies to hurt American workers.
He promised Hanjin support in sorting out its problems.
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On Friday, The Associated Press reported that Hanjin had 540,000 containers on ships that were in limbo and facing delayed delivery, according to a statement from the South Korea maritime ministry.
