Troubled South Korean firm Hanjin Shipping has been granted temporary bankruptcy protection in the U.S.
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Since Hanjin, which is South Korea’s largest shipping line, filed for bankruptcy protection, dozens of ships carrying more than half a million containers have been denied access to ports around the world.
The Federal Maritime Commission released a statement highlighting that it does not have bankruptcy authority and that the issue, at heart, “is a non-United States legal matter at the moment”, given that Hanjin is based in Seoul.
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.
U.S. Bankruptcy Judge John Sherwood on Tuesday ordered a hearing for Friday for the world’s seventh largest ocean shipper. Nine other ships are now idling near US ports, according to Lii.
Exporters and importers whose cargo has been stranded can seek recourse using guidance provided by the U.S. Customs and Border Protection.
One Hanjin captain operating a ship in global waters near Japan said his vessel has been given permission to enter a Japanese port Wednesday to unload cargo, but will be required to head back out soon after.
Hanjin Shipping was handling almost 8 percent of the trans-Pacific trade volume for the USA market, and with its container ships marooned offshore, major retailers have been scrambling to devise contingency plans to get their merchandise into stores.
“The 100 billion won funding, if it comes to pass, is not almost enough to save Hanjin Shipping at all”, an official at a creditor bank told Reuters.
“Retailers’ main concern is that there’s millions of dollars worth of merchandise that needs to be on store shelves that could be impacted by this”, Jonathan Gold, vice president for supply chain and customs policy at the National Retail Federation trade group, said last week. As of Thursday afternoon, two Hanjin ships were near the Port of Long Beach, according to the Marine Exchange of Southern California, which tracks cargo ship traffic. Tuesday, the shipper’s parent company said it will pour $90 million into efforts to resolve the disruption.
The Montevideo appeared to have dropped anchor after it had already unloaded its cargo and was about to leave the port, Long Beach port spokesman Michael Gold said.
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.
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The company’s efforts to extend its debts and sell off assets came to a head last month, when creditors led by Korea Development Bank refused to approve Hanjin’s restructuring plan.
