About 1,000 crew members are estimated to be stranded at sea considering that each Hanjin Shipping vessel that has been declined of port leave and entry around the world has at least 20 sailors on board.
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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.
Hanjin Shipping accounted for about 4% of container cargo imported to the Port of Los Angeles and 12% of container cargo to the Port of Long Beach during the first six months of the year, according to Datamyne, which tracks import-export transactions in the Americas. “Given the mutual interests, Hanjin may as well seek the support of large clients”. Shares in Korean Air Lines, the biggest shareholder of Hanjin Shipping, fell as much as 5.7 percent on Tuesday.
The Hanjin spokeswoman could not explain the discrepancy between its numbers, and the 79 Hanjin ships South Korea’s maritime ministry said were denied port access yesterday.
“The 100 billion won funding, if it comes to pass, is not almost enough to save Hanjin Shipping at all – it will most likely be used to pay fees to unload stranded cargo going forward”, said an official at a creditor bank, who was not authorized to speak with media and declined to be identified. An unnamed labor union official said that “despite (the urgency), the government is only demanding the cash-strapped shipping company to secure operating funds, pushing sailors closer to the edge of a cliff”.
All companies involved in serving Hanjin vessels, such as fuel and food suppliers, will most likely demand advance payments and guarantees before continuing cooperation, Seydlitz- Kurzbach said.
The South Korean government and the ruling Saenuri Party on Tuesday agreed to possibly provide financially troubled Hanjin Shipping Co. with a long-term loan worth 100 billion won (US$90 million), amid the mounting uncertainties about the future of the country’s logistics industry.
The South Korean line’s parent Hanjin Group will provide KRW60bn, while chairman Cho Yang-ho will provide KRW40bn.
The government said it is preparing to have rival Hyundai Merchant Marine buy out Hanjin’s vessels.
Hanjin’s share price plummeted about 30 percent early Monday, but a flurry of buying spurred by hopes for government help for the company helped erase some of the loss by mid-afternoon, when the stock was down 12.5 percent.
That still falls short of the fees that Hanjin Shipping must pay for services it needs to offload cargoes already on its vessels.
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