The latest casualty is one of the largest to date, South Korea’s Hanjin Shipping (Hanjin), the country’s largest shipping firm and the world’s seventh-biggest container carrier, which was placed into receivership by a South Korean court on Wednesday after its financiers ended financial support.
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A USA federal judge on Tuesday agreed to grant Hanjin short-term protection from its creditors, temporarily allowing the embattled shipping company to dock at US ports without immediate fear of retaliation.
If Hanjin is able to successfully obtain Chapter 15 bankruptcy protection in the US, it will be able to offload cargo at ports here.
With its assets frozen, Hanjin, which handles about 8% of all US cargo, is faced with its ships not being allowed to unload or take on cargo as dock workers and tugboat pilots are concerned about not being paid.
So far, the company is not behind in its rent payments, the bureau said, adding that it would closely monitor the handling of containers at the port. The worry is that Hanjin ships won’t be able to pay port fees or their contents might be seized by creditors, which would disrupt port operations.
Hanjin filed for receivership in South Korea last week after attempts to bail out the indebted company failed.
Hanjin also owes $20,000 in unpaid vessel traffic fees to the Marine Exchange of Southern California that were racked up over several months, according to its executive director, Capt. J. Kip Louttit.
If the cargo can’t be unloaded immediately, Samsung will be forced to transport alternative parts by air to help meet contractual obligations, entailing “great costs”, it said.
It remains unknown what can be done for cargo inside the approximately 540,000 containers stranded on Hanjin vessels still at sea.
An American court temporarily approved Hanjin Shipping’s application for bankruptcy protection. Samsung Electronics and LG Electronics make up the bulk of the shipment to the U.S. The group on Tuesday pledged to raise 100 billion won including private contribution worth 40 billion by Chairman Cho Yang-ho and 60 billion won through Korean Air Line.
As retailers gauge the impact of the disruptions, handbag maker Michael Kors Holdings Ltd says it has had concerns about Hanjin for some time.
Hyundai Merchant Marine, now under a creditor-led debt restructuring scheme, may seek to take over Hanjin Shipping’s healthy assets, such as port terminals and global business networks.
In a written request filed on Thursday with the Bankruptcy Court in Newark, New Jersey, Samsung said it would pay for cargo handlers to get its products off two Hanjin vessels.
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But import cargo volume at the nation’s major retail container ports should be at near-peak levels for September, according to the monthly Global Port Tracker report by the National Retail Federation and Hackett Associates.
