The port also said that Hanjin containers now in transit by rail to the port would be accepted until Labor Day.
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South Korea’s oceans ministry said on Friday (Sept 2) the port authorities of Busan and Incheon will guarantee payments for qualifying services offered to Hanjin Shipping Co Ltd vessels.
Importers trying to extract merchandise from Hanjin Shipping Co. vessels docked at LA’s two ports were being told to pay $400 to $800 extra to retrieve their containers.
South Korean rival Hyundai Merchant Marine (HMM) will deploy at least 13 of its ships to two routes exclusively serviced by Hanjin, while the South Korean government also plans to reach out to overseas carriers for help.
Brokers in Asia said about 540,000 containers are expected to face delays in deliveries.
Hanjin handles about 7.8% of the trans-Pacific trade volume for the US market, her letter said.
The National Retail Federation – the world’s largest retail trade association – urged the U.S. Secretary of Commerce and Federal Maritime Commission Chairman to work with the South Korean government and ports to try and prevent disruptions.
The bankruptcy is having “a ripple effect throughout the global supply chain” that could cause significant harm to both consumers and the US economy, the association wrote.
“It’s going to be exceptionally hard to turn it around as cargo owners are going to be very wary of booking with Hanjin, for fear that their boxes may be stuck in port if Hanjin vessels get arrested by the creditors”, said Alan Murphy, CEO of consultants SeaIntel Maritime Analysis.
The plan included a fund-raising scheme that would have seen Korean Air Lines, the shipper’s largest shareholder and part of the Hanjin group, take part in the shipper’s rights offering program and reduce the airline’s 33.23 percent equity stake through the cancellation or repurchase of shares. Courts will decide whether Hanjin, a member of The Alliance, a seven-member group of ocean carriers formed earlier this year, will be liquidated or be allowed to continue operation after restructuring.
The younger Cho took over management of Hanjin Shipping from Choi Eun Young, the wife of his younger brother, who ran the shipping firm until his death in 2006. Since vessels already are operating at high capacity, shippers may wind up paying a premium to squeeze their cargo containers on board, said Jock O’Connell, worldwide trade adviser to Los Angeles-based Beacon Economics.
Ocean freight shipping fees between China and the US have soared as much as 50 percent since the bankruptcy was announced.
There are also concerns the situation could mean price rises for goods from the Far East – with shipping costs spiking as suppliers race to find alternative shipping companies.
A Home Depot Inc. spokesman said Hanjin isn’t its only carrier so it doesn’t expect a material impact.
Global demand and trade have suffered since the 2008 recession, but steamship lines continued to build more and larger vessels.
As capacity tightened overnight during such a busy time, shipping rates soared. A few months ago, Poskus said, prices hit historic lows globally – down to as much as $600 per container from Shanghai to Los Angeles.
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Even the biggest ocean shipping company, A.P. Moller-Maersk, is seeing its profits fall, and scrambling to cut costs. According to Korea International Trade Association (KITA) on Thursday, about 73 percent of Korea’s exports by amount were shipped via sea as of previous year while 26 percent via aviation.
