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Hanjin bankruptcy creates ‘serious predicament’ for SoCal companies
From the 25 or so crew members stuck on each of the ships, to trucking companies trying to move containers to and from ports, to retailers waiting for goods to arrive, the unprecedented bankruptcy of the seventh-largest carrier in the world could have far-reaching implications.
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“U.S. -bound cargo is already being delayed at origin ports and Hanjin ships loaded with cargo idle unable to enter USA ports, containers are being detained”, she stated. In this Wednesday, Aug. 31, 2016, photo, the container ship Hanjin Montevideo is escorted from the Hanjin Terminal in the Port of Long Beach, in Long Beach, Calif. Hanjin has filed for bankruptcy and the ship Han.
An executive at the Korea International Freight Forwarders Association said on Wednesday he had been inundated with calls from cargo owners anxious about the fate of their shipments in transit to the United States and Europe.
The Seoul Central District Court in South Korea is expected to decide in coming weeks whether Hanjin Shipping should be dissolved.
South Korea’s Hanjin Shipping, which ships manufactured products such as clothing, toys and electronics to US retailers, roiled the industry when it filed for bankruptcy Wednesday, just in time for the start of the busiest shipping season of the year as retailers prepare for the holiday shopping season.
“The company is internally looking into measures in case our cargo gets stranded while it’s being shipped”, LG said in the email in a response to a Bloomberg query.
The demise of Hanjin Shipping, Korea’s No. 1 shipping company, is sending huge tidal waves across global trade.
“There are all these different dimensions and everyone is going, ‘Now what do we do?'” said Louttit of the Marine Exchange of Southern California, a nonprofit vessel traffic service for the ports of Long Beach and Los Angeles.
Hanjin’s bankruptcy was a major factor, he said, although rates also were affected by the upcoming Chinese National day holiday, which will close factories, and by shipping lines sidelining vessels to reduce overcapacity.
But the failure of the firm, which ranks as the world’s seventh-largest shipper of containers, is unlikely to have a significant impact on operations at the Port of Felxistowe, with none of Hanjin’s own ships now operating on routes calling at the port.
South Korea’s ailing shipbuilders and shipping firms, which for decades were engines of its export-driven economy, are in the midst of a wrenching restructuring.
Hanjin Shipping on August 31 filed for court receivership, after its creditors made a decision to halt their financial support to the debt-ridden shipper. The SPA will collect various charges of $350 per container, with authorization required from Hanjin, before the cargo is released.
In a letter to customers Wednesday, Hanjin said the company “will exercise its utmost efforts to fulfill its duty to protect the interests of customers”. Uncertainty about Hanjin’s future raised concerns that its ships could be subject to seizure by creditors, clogging the ports.
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However, a number of reports have indicated Hanjin vessels are now being turned away at ports around the world, while court documents in Singapore show one of its vessels, Hanjin Rome, was arrested on Monday.