South Korea’s Hanjin Shipping Co has been keeping up with its rent payments for the use of wharfs at Kaohsiung Port, even though the container carrier has applied for bankruptcy protection in the United States, the Ministry of Transportation and Communications said yesterday, adding that it would meet with Taiwanese shipping firms today to determine how they would respond to the changing circumstances.
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The collapse of Hanjin Shipping 117930.KS will boost the cost to USA businesses and consumers of a wide range of imported goods, from furniture and clothing to fresh fruit and frozen meat, according to federal agencies, shippers and retailers.
A Korea Development Bank spokesman said he is checking whether the bank has received the court’s request.
The maker of electronic goods including Galaxy smartphones said the judge should issue an order barring the seizure of ships and allow it and other cargo owners to retrieve their goods by paying cargo handlers, who have been demanding payment guarantees. Numerous caucus members represent the Long Beach and L.A. ports affected by the Hanjin situation.
According to AP, Hanjin, the world’s seventh largest container shipper, said it had filed for creditor protection in dozens of countries, which would free vessels to land without being seized. “It is understandable that port terminal operators, railroads, trucking companies and others don’t want to do work for Hanjin if they are concerned they won’t get paid”.
“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.
Hanjin would normally pay the fees for port usage and container handling as part of its freight services. That includes $36 million from the personal fortune of the company’s chairman. Separately, South Korea’s ruling Saenuri Party asked the government to offer about 100 billion won of low-interest loans if the group provides collateral.
Helped by cheap loans, container lines have hung on even as freight rates to move sneakers to Barbie dolls from Asia to Europe and the US plunged on sluggish demand.
The company filed for creditor protection after a last-ditch restructuring of the company was rejected by its lenders and it was unable to arrange emergency financing, which left 86 of its vessels stranded at ports in 26 countries. “There’s been a downturn in the containerized cargo trade since 2014”.
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Meanwhile, ships may soon be moving again, but the full impact of the bankruptcy is only beginning to be felt.
