Hanjin, the world’s seventh-largest container shipper, filed for bankruptcy protection last Wednesday and stopped accepting new cargo.
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“Our ships can become ghost ships”, said Mr Kim Ho Kyung, a manager at Hanjin Shipping’s labour union. The US judge said that he will check Hanjin Shipping’s measures to protect its creditors through an additional trial. At the same time, South Korea’s ruling Saenuri Party asked the government to offer about 100 billion won in low-interest loans to the shipping line if Hanjin Group provides collateral, in what is effectively a government-funded loan.
Estimated total value of cargo now loaded on Hanjin Shipping vessels.
Hanjin has struggled with debts and losses for years. Cho would be ready to present his share by early next week, said Hanjin Group.
With the country’s largest ocean shipper idled and the shipbuilding industry also in crisis, a government task force is directing moves to salvage the container shipping sector, which like ocean shipping worldwide has been battered by weak demand and overcapacity.
The Seoul Central District Court did not say how much it had requested from lead creditor Korea Development Bank but noted that plans by Hanjin Shipping’s parent firm to raise 100 billion won ($90 million) to fund the unloading of cargo were inadequate.
In court papers filed Thursday, Samsung Electronics said “cargo owners are being held hostage”, while Maher Terminals said it “is not required to extend free credit to Hanjin, and should not be forced to”.
“We did have a limited number of containers hung up on those ships; there’s going to be some pricing pressure at this point”, chief executive officer John Idol said Wednesday at a conference in NY.
For goods which are now on Hanjin Shipping’s vessels, the ministry urged the exporters to work with the representative office of the company and their importers to seek appropriate solutions for the parties involved.
Samsung Electronics also filed support on Tuesday for Hanjin’s petition, saying it has about US$38 million (S$51 million) in merchandise on two Hanjin vessels, off the Californian coast, that are not able to dock without a USA court order protecting the company against creditors trying to seize the cargo.
“Retailers always have robust contingency plans, but this degree of uncertainty is making it challenging to put those plans in place”, said Jessica Dankert, senior director of retail operations for the Retail Industry Leaders Association, a trade alliance with members including companies like Best Buy, Wal-Mart and Target.
Southern California officials are anxious that last week’s bankruptcy filing by Hanjin Shipping could threaten local union workers’ jobs and retailers’ access to imported goods as the holiday season approaches.
If the cargo can not be unloaded immediately, Samsung will be forced to transport alternative parts by air to help meet contractual obligations, entailing “great costs”, it said.
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“The upcoming months are critically important to retailers, particularly ahead of Black Friday and the holiday shopping season”, Samsung Senior Vice President Ahn Jung-tae said in a court filing.
